Thirty-year-old Allesch-Taylor’s STG Holdings has told MDA it does not intend to raise its stake further, but it has also written to the firm requesting meetings to discuss its future strategy.
STG chairman Allesch-Taylor is keen for MDA to stick to its core business, but is unhappy about the firm’s failure to make consistently good profits and wants to meet directors in the next fortnight to give them his advice.
But he has already welcomed one move that MDA is to announce officially next week – the appointment of former Taylor Woodrow chief executive John Castle as a non-executive director.
Industry sources were surprised at Allesch-Taylor’s decision to take a stake in 400-strong MDA (21 May), and were even more taken aback when STG said it was considering bidding for shares it did not own.
But now, Allesch-Taylor has told MDA that STG will not be increasing its stake – for the moment at least – and the firm has written to shareholders to explain the situation.
A letter dated 23 June from MDA chairman Simon Metcalf said: “The board will be meeting with Mr Allesch-Taylor to identify ways in which STG may contribute to the future development of MDA.
“In recent months, the board has reviewed a number of ways in which to maximise shareholder value. I shall write to you again with further news in conjunction with the preliminary announcement of the results for the year ending 30 June 1999.” Allesch-Taylor said: “I am looking forward to elaborating on my plans with the board of MDA over the next couple of weeks. We haven’t been given a lot of information from the company about how it operates, but at the very least we feel we can contribute intellectually to how they might not lose more money.
“Very few companies have the sort of turnover stream that MDA have, and the high-profile in construction that they have around the world, so there is great potential there.” Allesch-Taylor said many people had misunderstood why his firm had taken its stake in MDA. It had been thought that he wanted to transform the firm into a development company, but he said he wants instead to offer the sort of “one-stop shop” total property service that WS Atkins is now attempting to offer.
“MDA may be the first, but it certainly isn’t the last company of this type we take a stake in,” he said.
STG describes itself as a “development facilitator”. It works in partnership with bigger developers such as Miller to assemble sites and win planning permissions, but Allesch-Taylor says he needs the fees from investments in companies such as MDA to give his firm a steadier income stream.