The 'breathtaking daring' of the man who targeted the big guns

The 'Telegraph' might have eluded him but Lord Hanson was a master of the audacious bid. Ivan Fallon looks back on his career

Lord (James) Hanson's passing last week was properly recorded in the obituary columns and business pages, where he was duly acknowledged as the greatest practitioner in the art (and it is an art) of bidding for companies in Britain's history.

His long track record was set out in great detail, yet few accounts managed to convey the sense of excitement Lord Hanson exuded at the height of his powers and the sheer, breathtaking daring of the man as he took on the business establishment on both sides of the Atlantic - and (mostly) won.

Take, for instance, the events of 6 December 1985. As the board of Hanson Trust, then Britain's fifth-largest company, assembled in its London West End office, there was a new item on an agenda that frequently contained surprises. Hanson told his directors that The Daily Telegraph was for sale, an unknown Canadian called Conrad Black was bidding for it, and he had been approached by a group of individuals, including Nicholas Berry, son of the Telegraph's proprietor, Lord Hartwell, to cut Black off at the pass.

It would be a modest investment by Hanson standards: £20m to £30m should give them control of Britain's largest-selling quality newspaper, which had hit hard times and needed urgent help to enable it to pay the wages and stay in business. Black had emerged out of the blue; Hanson had never heard of him until a few months before.

Hanson was seriously tempted by the Telegraph, seeing it as an amusing digression from the more serious business of acquiring long-established companies such as London Brick or Ever Ready, invariably against the wishes of the company involved. The previous day he had journeyed into the City to meet with NM Rothschild, which happened to be bankers to both Hanson and the Telegraph. Black's offer, he was told, was already on the table, and he would have to be quick to stop him.

But the Hanson board that morning was preoccupied with wider considerations. It was an extraordinary - even unique - time in British corporate history. Only three days before, the City's biggest and most notorious bid battle, the Guinness takeover of Distillers, had officially opened and would eventually lead to the jailing of half a dozen of the leading figures in the British and American corporate worlds, including Ernest Saunders, Gerald Ronson and Ivan Boesky.

Hanson had seriously considered bidding for Distillers, but just a week before had abruptly switched his sights to an even bigger prize: he had decided to make a £2bn hostile offer for the mighty Imperial Group, a pillar of the business establishment and a company which until a few years before had been many times the size of Hanson. That too was on the board agenda that morning - but down the list from the more urgent matter of the Telegraph.

A couple of hours later, the board broke up, having reached a fateful decision: it was "no" to the Telegraph, basically because the board wanted its chief to devote all his attention to the coming battle for Imperial.

The Imperial bid marked the high water mark both for Hanson and the takeover tide that was carried to extremes by Saunders and his advisers. The climate, which had favoured the hostile acquisition before, now began to change and corporate governance, political correctness and changes in accounting and takeover rules gradually tilted against him. This was confirmed a few years later with the loss of Hanson's most audacious bid of all, for ICI.

Yet for a dozen years or so he stood tall. Under the regime of his great friend Margaret Thatcher (it was once said of him that he had three great loves: Thatcher, capitalism and the US, in no particular order), Hanson was in his element, free at last to make the kind of takeovers and achieve the scale of rationalisation of old-fashioned industries he had only dreamt of before. For more than 20 years, he and his great friend and partner Gordon White defied the law of averages and of the stock markets that said their style of conglomerate company would fall flat on its face, as so many had on both sides of the Atlantic.

Hanson first emerged on the takeover scene in the 1960s, to be categorised (wrongly) as a lieutenant of the then takeover king, Jim Slater. After the crash of 1973, which destroyed Slater and many like him, he became the great survivor, continuing to run and improve the companies he had acquired at the height of the heady boom. Unlike most of the corporate raiders, he had basic tenets which he stuck to through thick and thin: he bought only companies with potential for restructuring; he put in an active management to run the businesses post-acquisition; and he coldly disposed of the restructured assets once the job was complete. It worked brilliantly for him during this time.

By the 1980s Hanson and White had been in the business of taking over companies for almost three decades, and had more experience at it than almost anyone in the world - which they now used to the full in the takeover frenzy that gripped both sides of the Atlantic.

The City, which had been generally dismissive of the two Yorkshiremen, now took them very seriously. They could boast a record unequalled by any company of the day: annual sales growth of 31 per cent; earnings per share up a compound 36 per cent; and a share price rise which meant that anyone who had backed them with £100 when they first floated in 1964 would have had an investment worth £70,000 23 years later.

Hanson won Imperial at a price of £2.5bn. But he left Conrad Black free to have his way with the Telegraph. And the rest, as they say, is history.

Ivan Fallon is chief executive of Independent News and Media UK, owner of 'The Independent' and 'The Independent on Sunday'.