WHO GETS YOUR VOTE? The Sunday Times business team will choose the winner from the list on this page over the next fortnight, and we would like to hear your views. Send them to businessperson2006@sunday-times.co.uk. You can also read how we covered the contenders’ rise to prominence online at timesonline.co.uk/businessperson.
We will reveal the winner in our issue of December 31 so you can raise a glass to the victor during your New Year’s Eve celebrations. Here, in alphabetical order, are the contenders.
Mick Davis
XSTRATA
A small army of bankers, lawyers and accountants owe their thanks to Mick Davis, chief executive of Xstrata, the £22 billion Anglo-Swiss mining giant. Since he took over the shell company four years ago he has been a one-man deal machine, growing it into a mining group that is now snapping at the heels of titans such as Rio Tinto and BHP Billiton.
What has marked him out is his huge bet on a commodity “super cycle”. He has paid a high price for assets but rising prices for nickel, copper and coal have generated huge cashflow to reduce debt. His appetite for risk has rewarded investors, who have seen the share price rise 367% since the start of 2002.
Clara Furse
LONDON STOCK EXCHANGE
After she spent 2005 fighting off bid approaches, most analysts thought that Clara Furse and her company, the London Stock Exchange (LSE), had experienced their most exciting year ever. They were wrong. This year the suitors have formed an even longer queue and, through it all, the LSE’S Canadian-born chief executive has amazed, excited and deeply frustrated the market by maintaining an icy silence, even as Nasdaq launched its stunning 950p-a-share bid (Macquarie’s, the first, was at only 580p) and again at its “final” offer of 1,243p.
As well as fighting off bidders, Furse has had to deal with other problems — some big customers plan to form a rival exchange, and her once-loyal institutional shareholders have deserted her en masse.
She has in the meantime masterminded a lucrative share buyback for the LSE’s current owners and presided over a boom in business. London’s emergence as the world’s financial capital has helped the LSE immensely, with the money raised from floats up 96%, and trading up 52%. Furse argues that this means the LSE is still undervalued — and Samuel Heyman, the corporate raider who increased his stake to over 9% at more than 1,300p a share last week, clearly agrees.
Chad Hurley, Steve Chen and Jawed Karim
YOU TUBE
Google’s $1.6 billion purchase of You Tube — a loss-making 18-month-old company with an entirely unproven business model — was one of the stories of the year. It instantly turned Chad Hurley, Steve Chen and Jawed Karim, the founders of the video-sharing website, into internet celebrities and multi-millionaires.
While You Tube’s commercial value was uncertain, its appeal to users was crystal clear. By July, 100m video clips were being watched daily, and You Tube had long overtaken Google Video. The enormous growth in online video was one of the big themes of 2006, and You Tube was the undisputed king.
John McAdam
ICI
When John McAdam took the helm of ICI in April 2003, the former flagship of British industry had fallen on hard times. It had recently issued a profit warning, which claimed the scalp of former boss Brendan O’Neill, and was facing a daunting combination of weak markets, huge debts and an enormous pension-fund deficit.
McAdam has sold non-core businesses to create a slimmed-down group concentrating on paints, starches and adhesives. The shares have more than trebled from 108p to 426p, a near six-year high, valuing the group at £5.1 billion. Meanwhile, profits have revived from a measly £85m in 2005 to £500m last year.
McAdam added to his impressive record last month by selling off Quest, the flavours and fragrances business, for £1.2 billion. He not only managed to get a hefty price, but the deal will also allow the company to eliminate its outstanding £900m in debts and pump £230m into the pension fund, reducing the deficit to a more manageable £1 billion. Even better, the sale means that for the first time in years, ICI will have cash on its balance sheet.
Lakshmi Mittal
MITTAL STEEL
When Guy Dolle, the chief executive of the European steel group Arcelor, received an invitation to dinner at Lakshmi Mittal’s Kensington house on Friday, January 13, he should have suspected something unlucky was about to happen. Over dinner, Mittal sounded him out on a merger between Mittal Steel and Arcelor — a plan that later became a furiously contested hostile bid after Dolle declined to play ball.
Mittal won, paying £18.4 billion for Arcelor. The amalgamated company is the biggest steel group ever created, controlling about 10% of world production. And in case there was any doubt who was in charge, Mittal, who was slated to be president and later chairman, was quietly appointed chief executive of Arcelor Mittal last month.
Rupert Murdoch
NEWS CORPORATION
At the risk of finding ourselves in Private Eye, we think Rupert Murdoch, chairman of News Corporation, ultimate owner of The Sunday Times, deserves consideration this year.
Quite apart from enjoying record profits from movies such as Ice Age: The Meltdown and the Fox television interests, the media group reaped the benefit of its 2005 purchase of My Space, the networking website. My Space continued to grow explosively, and now has more than 80m monthly users.
Better still, My Space demonstrated its commercial potential through a $900m advertising deal with Google — more than recouping its $580m purchase price. The clear sense that Murdoch “got” the internet put momentum behind News Corp’s shares, which have risen about 50% since the autumn of 2005.
He also chairs BSkyB, where his son James routed NTL’s attempted £5 billion takeover bid for ITV by buying a 17.9% stake. Just to complete a banner year, Murdoch is reportedly close to a multi- billion deal that will settle a long-running dispute with John Malone, a 19% shareholder in News Corp.
Stuart Rose
MARKS & SPENCER
The debonair Stuart Rose swapped his Richard James bespoke suits and £26-a-pair Fogal socks for Marks & Spencer attire in 2006 after a storming year in which the company’s share price passed 700p at one stage. The sharp turnaround in the retailer’s fortunes comes only two years after M&S rebuffed a 400p-a-share takeover offer from Sir Philip Green. Rose now looks tantalisingly close to hitting Sir Richard Greenbury’s £1 billion profit milestone this year, which would earn him a place in the hall of fame at the iconic British high-street chain.
Rose’s success has been helped in no small part by a strong team that includes Steven Sharp, who has spearheaded successful advertising campaigns featuring Twiggy and Shirley Bassey. Stores have been revamped, prices trimmed to make its products more competitive and there has been greater innovation, particularly in food.
Robert Schofield
PREMIER FOODS
The chief executive of Premier Foods has shown a huge hunger for deals since the company came to the market in 2004. Since flotation, Premier has bought Birds desserts, Quorn, Cauldron and Campbell’s Soup’s British operation, which includes Oxo, Batchelors, Homepride and Fray Bentos.
But this month brought what Schofield justifiably describes as a transformational deal, with Premier taking over RHM, home of brands such as Hovis, Mother’s Pride, Bisto, Mr Kipling and Paxo.
The £1.2 billion purchase will more than double Premier’s annual sales, catapulting it into first place in the league table of British food producers above Mars, Nestlé and Northern Foods.
Philippe Varin
CORUS
When Corus had its annus horribilis in 2002, few thought salvation for the Anglo-Dutch company might come from France. But in choosing Philippe Varin, a French metals executive with a background mainly in aluminium, Corus’s board made a shrewd decision. Varin has put Corus’s house back in order — and kept alive the rump operations of British Steel in the process — and is now presiding over an auction for the company between Brazilian and Indian rivals. Varin may have been lucky — high steel prices have given him a big push in the right direction — but Corus shareholders, and the company’s 167,000 pensioners, should be sending him a Christmas card.
Ben Verwaayen
BT
Calls over fixed-line telephones are supposed to be becoming a thing of the past, but that hasn’t stopped BT’s progress under Ben Verwaayen. Shares in the telecoms group have risen more than 40% this year, as investors have grown confident that BT can sustain the growth in sales and profits that now stretches back over 11 consecutive quarters.
Traditional voice calls are a diminishing part of BT’s business, but the lost revenues have been more than made up by the growth in broadband and by the group’s global services division, which provides and manages data networks for large companies and the NHS. BT Global is now the biggest business and doubts about its profitability are receding.
The launch of BT Vision — the television and video-on-demand service — is more evidence of how the group is changing.
Previous winners
THE WINNER of this year’s competition will be joining an elite band. The previous winners of the title are:
2005 Sergey Brin and Larry Page, the founders of Google
2004 Steve Jobs, chief executive of Apple
2003 Sir Ken Morrison, chairman of Wm Morrison
2002 Eliot Spitzer, New York attorney-general
The year's business 'villains' - bosses who blundered
EVERY YEAR business throws up heroes and villains, and in 2006 there was a long list of the latter.
It might be too much to describe Sir Digby Jones as a villain, but the former CBI chief had a year he might care to forget. It ended on a positive note, with his appointment as the government’s skills envoy, but was dominated by bad publicity over his board role at Isoft, the software firm at which accounting problems were uncovered.
The Sunday Times revealed in February that Jones, then the firm’s senior non-executive, had attended only one meeting of the audit committee in his final year there.
He was not the only casualty. Patrick Cryne, Isoft’s founder, was lambasted for having made millions from the sale of shares before the chaos at the company became apparent. Steve Graham, another founder, was suspended from the firm in August.
Charles Dunstone, boss of Carphone Warehouse and a business hero to many, also had a year he will prefer to forget. The launch of his “free” broadband offer turned into a customer-relations nightmare, with many users unable to receive the service they had paid for.
Hank McKinnell was pushed out as chief executive of Pfizer, the world’s biggest drug company, after presiding over a 40% decline in its share price. Pfizer’s problems worsened savagely last week when it had to abandon its follow-up to Lipitor, a $13 billion-a-year cholesterol-lowering drug whose patent is heading towards expiry.
Michael Jackson, who took a £1.5m signing-on fee for becoming chairman of Party Gaming when it floated in the summer of 2005, had to endure the wrath of investors in the wake of the sector’s collapse after a ban on internet gambling in America. Jackson, previously with Sage, took £500,000 in cash (to pay his tax bill) and invested the rest in the shares.
If anyone epitomised the fate of the online-gambling sector, it was David Carruthers, the former chief executive of Betonsports, who was arrested in the transit lounge at Dallas airport while waiting for a connecting flight to Costa Rica. He is now under house arrest in St Louis, Missouri, and awaiting trial on charges related to illegal internet gambling.
But the final mention should go to Sir Clive Thompson, who became a Christmas pantomime villain after the hampers company he chaired, Farepak, collapsed into administration, leaving thousands of customers facing a glum festive season.
