McLaren - Ron Dennis set to leave McLaren F1

[Rich_W]

LaurasOtherHalf said:

Or, as I wondered in the other thread (let me be clear, I have no idea if this is in any way possible or relevant) could there be a conflict of interests that means his suspension is necessary to push forward a deal.

Thoughts?

If that were the case he would step down voluntarily surely?

[skwdenyer]

LaurasOtherHalf said:

Or, as I wondered in the other thread (let me be clear, I have no idea if this is in any way possible or relevant) could there be a conflict of interests that means his suspension is necessary to push forward a deal.

Thoughts?

If that were true, it would seem strange for Ron to go to the High Court to try to stay the suspension - unless you're suggesting that was some elaborate bluff?

[LaurasOtherHalf]

skwdenyer said:

If that were true, it would seem strange for Ron to go to the High Court to try to stay the suspension - unless you're suggesting that was some elaborate bluff?

Has it been publicised exactly what the high court case was about though?

Rich_W said:

If that were the case he would step down voluntarily surely?

I thought exactly the same but as I mentioned in my post I really have no idea how such take overs are conducted. If I'm honest I'm just saddened that it's come to this for the team.

[RYH64E]

LaurasOtherHalf said:

skwdenyer said:

If that were true, it would seem strange for Ron to go to the High Court to try to stay the suspension - unless you're suggesting that was some elaborate bluff?

Has it been publicised exactly what the high court case was about though?

Rich_W said:

If that were the case he would step down voluntarily surely?

I thought exactly the same but as I mentioned in my post I really have no idea how such take overs are conducted. If I'm honest I'm just saddened that it's come to this for the team.

The ownership structure of McLaren isn't the norm, two shareholders own 75% of the shares so they pretty much get to call the shots. Minority shareholders have rights, but not many, providing the majority shareholders follow the rules they decide how the company is run, and who runs it.

[skwdenyer]

RYH64E said:

LaurasOtherHalf said:

skwdenyer said:

If that were true, it would seem strange for Ron to go to the High Court to try to stay the suspension - unless you're suggesting that was some elaborate bluff?

Has it been publicised exactly what the high court case was about though?

Rich_W said:

If that were the case he would step down voluntarily surely?

I thought exactly the same but as I mentioned in my post I really have no idea how such take overs are conducted. If I'm honest I'm just saddened that it's come to this for the team.

The ownership structure of McLaren isn't the norm, two shareholders own 75% of the shares so they pretty much get to call the shots. Minority shareholders have rights, but not many, providing the majority shareholders follow the rules they decide how the company is run, and who runs it.

If such a structure were set up today, I'd expect a shareholders' agreement with a raft of provisions designed to protect all parties - Ron would have been unlikely to want to be able to be sacked like this, for instance.

Given how long it is since this company has been going (MTG is the same company formed in 1985, just renamed a couple of times), I can inagine that many of those protections are not in place.

I note that the Bahrainis appointed 3 new directors to the Board on 26th October - to ensure a majority? That was shortly after the 2015 accounts were signed, which showed a slump in shareholders' funds from £10m to £4m. Possibly coincidence.

Also in the 2015 accounts is a 2014 amount for "compensation for loss of office" of £10m - guessing that was Whitmarsh.

The F1 team lost £31m in 2014, but made a £5m profit in 2015. The Group owes Ron £7m in loan repayments FWIW.

MTG now owns no shares in McLaren Automotive.

[ralphrj]

skwdenyer said:

I note that the Bahrainis appointed 3 new directors to the Board on 26th October - to ensure a majority?

That was my interpretation. There have been no changes to the group shareholding so the timing of the appointments made me wonder whether there had been an issue with forming a quorum.

[RYH64E]

skwdenyer said:

If such a structure were set up today, I'd expect a shareholders' agreement with a raft of provisions designed to protect all parties - Ron would have been unlikely to want to be able to be sacked like this, for instance.

It would be a strange shareholder's agreement that guaranteed operational control in perpetuity for one of the minority shareholders, not impossible, but unlikely. If the other two shareholders own 75% of the equity they're likely to get their own way, one way or another, and so they should. To keep control you need to keep a majority of voting shares, anything else leads to vulnerability come the inevitable disagreements and falling out.

[revrange]

My take much of this comes back to the MW being removed, and Ron promising big changes and improvements.

These havent come and the decision not to go with the title sponsor who was lined up at the time, as to not lower the rate card (We are manchester united as ron said.) Lets say that deal was £40m a year, that's £120m now the team has missed out on, and be £160m by the end of next year. That is the kind of money that allows you to cherry pick the best staff from other teams, and also increase development rates.

I'd think the other shareholders will be concerned by lack of any improvement on track, lack of new sponsors (ok BP coming in but swapping for Exon) etc.

[ralphrj]

ralphrj said:

skwdenyer said:

I note that the Bahrainis appointed 3 new directors to the Board on 26th October - to ensure a majority?

That was my interpretation. There have been no changes to the group shareholding so the timing of the appointments made me wonder whether there had been an issue with forming a quorum.

Just to add to my previous post:

Prior to 26th October the board comprised:

Ron Dennis - Chairman
Andy Myers - CFO
John Allert - Brand Director
Ekrem Sami - McLaren Marketing

Mansour Ojjeh - TAG Holdings
Shaikh Alkhalifa - Kingdom of Bahrain
Mahmood Al Koojeji - Kingdom of Bahrain

Plus Timothy Murnane as Secretary.


Then on the 26th October the following were added:

Rima Al Masri - Kingdom of Bahrain
Raed Fakhri - Kingdom of Bahrain
Hovsep Kirikian - Kingdom of Bahrain

So, like skwdenyer, I would speculate that the Bahrainis and Ojjeh tried to oust Ron at the October board meeting but couldn't carry the motion. Therefore, the Bahrainis exercised their right to appoint more directors to the board (to match their 50% stake) and then called an extraordinary general meeting for last week where they forced Ron out.

[Vaud]

Given there hasn't been an announcement, are they waiting for RD to be back and a board meeting tomorrow/Wednesday?

[CraigyMc]

Vaud said:

Given there hasn't been an announcement, are they waiting for RD to be back and a board meeting tomorrow/Wednesday?

There's no reason why they need to make an announcement at all - in fact, it may be bad for business to make a fuss about it.

Ron may have other ideas.

[Athlon]

I wonder what Honda are making of all this?

[Vaud]

Athlon said:

I wonder what Honda are making of all this?

I'm guessing that Honda might be RD's lifeline as they bought into him and his leadership when they came back to support McLaren?

[RYH64E]

ralphrj said:

So, like skwdenyer, I would speculate that the Bahrainis and Ojjeh tried to oust Ron at the October board meeting but couldn't carry the motion. Therefore, the Bahrainis exercised their right to appoint more directors to the board (to match their 50% stake) and then called an extraordinary general meeting for last week where they forced Ron out.

As I understand it, shareholders can remove a director without needing the approval of the board, afaia, a simple majority of shareholders can pass such a resolution. The ex-director would most likely remain as an employee unless he chose to resign.

[MartG]

Hmmmm

McLaren sacks Ron, Ron buys Manor, Honda supply Manor with much improved engine, Manor 2018 WCC

You heard it here first folks

[revrange]

Vaud said:

I'm guessing that Honda might be RD's lifeline as they bought into him and his leadership when they came back to support McLaren?

Did they? They did the deal with Whitmarsh was around.

[Vaud]

revrange said:

Did they? They did the deal with Whitmarsh was around.

I confess to forgetting the exact timing.

[rubystone]

revrange said:

Did they? They did the deal with Whitmarsh was around.

I'm not sure how much Martin had to do with that deal though. I have no doubt, given the way Honda operate, that the deal was closed because of the previous (successful) relationship with Dennis' McLaren.

[Athlon]

This is why I posed the question. it will be interesting to watch what their take on all this is.

[rev-erend]

Ron is getting a bit old for all this. Perhaps he might decide has had enough and join Neil Trundle in the historic section..

Edited by rev-erend on Tuesday 15th November 14:34