Allesch-Taylor’s has a knack for brusque introductions, as quantity surveyor MDA learned a year ago when his investment business, STG, suddenly bought a 29.75% stake. At the time, his no-nonsense approach was not appreciated by the MDA board. Come May, as the 30-year-old entrepreneur is keen to point out, he will get another opportunity to bid for the whole group under the City code on takeovers and mergers.
The MDA board will be understandably cautious. One of the oldest QSs, the firm has only just emerged from an abortive approach by consulting engineer High-Point Rendel. And with a large chunk of the company’s equity still held by former directors, and rivals commenting that MDA needs to find a merger partner soon, the market is flooded with rumours about its future.
Allesch-Taylor wants to help the 400-strong firm merge with other support services companies and go for a stock market listing. But what puzzles observers is why this high-flying, self-confessed “product of the eighties” is interested in quantity surveying when he has just spent £85m buying a 60% stake in US company Internet Holdings. And who does he think he is, anyway?
At work, Allesch-Taylor is a cyclone of deal-nailing energy. His sunken eyes reveal that he works 15-hour days and sleeps a maximum of five hours. “It’s all I need,” he says. “I run the British operations during the day, but come 2pm, New York is open, and then the West Coast is eight hours behind.
I could technically have a 24-hour day.” He says he is more of a “thinker than a fighter, but admits: “I have the capacity to be hostile in business.” It’s easy to see how. At six foot eight, he is more than capable of intimidating others. “I ask my staff for just one thing: my own way,” he says, before adding, “Fortunately, my board of directors very rarely give me it.” His staff describe him as bold, tough-minded, dynamic and fiercely loyal.
Hertfordshire-born Allesch-Taylor went straight from boarding school to a Yorkshire-based stockbroker at the age of 18. “My first day of dealing was Black Monday,” he recalls. “For about five seconds, I thought I’d caused it.
“It was a boom time of young men with too much money and not enough sense, but the irony for me is that when I first got into stockbroking, we had the biggest crash we’d ever seen. And then when I got into property, it was the beginning of the biggest property depression we’d ever seen. Now that I’m getting into the Internet, maybe that industry should start panicking.”
I run the British operations during the day, but come 2pm, New York is open, and then the West Coast is eight hours behind. I could technically have a 24-hour day
His property work was somewhat more successful than he suggests. Between 1992 and 1997, he secured a 3 000 000 ft2 portfolio in joint ventures with developers such as Miller. His main role was to assemble sites and secure planning permissions – “financial engineering rather than development”, he says. Then, at 27, he bought a 29.9% stake in Worthing Premier Properties, changed its name to STG and took it to Ofex in December 1997 – an omen, perhaps, for his plans for MDA.
Last spring, dismayed with the planning process and keen to generate greater cash flow, Allesch-Taylor stumbled across the QS. “When we bought the MDA stake, people said, ‘Wait a minute, why is this upstart property company buying into such an established and respected QS practice?’ Well, I’ve been a client of QSs for 10 years and while I’m not saying I could run it on a daily basis, let’s be honest, this wasn’t a microchip factory in Singapore.”
He says the reason he was attracted to MDA was the loyalty of its clients and staff. He describes QSs as “the gentlemen of the industry”, recalling how one QS talked himself out of a job by advising him not to take a contractor’s cut-throat bid on a property. “I think he saved my early career,” he says.
But Allesch-Taylor admits that he may not have made his respect for the profession clear in his early dealings with MDA. “We didn’t handle the initial approach particularly diplomatically. I don’t think we went far enough to allay the fears of directors or staff.”
Allesch-Taylor bought the stake by allowing MDA shareholders to swap their shares for STG ones, which were offered at 75p. Now, he says, STG is worth more than £7 a share. “It was abundantly clear that MDA didn’t welcome STG’s advances. But those MDA shareholders who sold to STG have seen an 800% increase in the value of their shares. That’s a pretty compelling argument, if you ask me.”
So, how will he make money out of MDA, a firm that made a measly pre-tax profit of £189 000 in the year to June 1999 after suffering a £355 000 loss the previous year? First, he wants to give all the staff a stake in the business. He also plans to offer to inject cash into the company where necessary.
Ultimately, he wants MDA to merge with or acquire a design and facilities management business, similar to the path already trodden by the likes of WS Atkins. But he says the board must decide whether to accept his overtures. “MDA knows what its clients want and need better than I do, and it’s whether or not MDA says: ‘Look, we’re going to agree with this philosophy, we’re going to give it a go.’”