Ferranti chief due for pounds 1m pay-off

EUGENE Anderson, chairman and chief executive of Ferranti International, stands to collect a pay-off approaching pounds 1m, excluding any pension entitlements, if GEC's token 1p-a-share rescue bid goes through.

Mr Anderson, who emphasised this weekend that there is no alternative to the GEC offer apart from a damaging receivership, insisted that no discussions over personal terms took place during negotiations with GEC, saying that would have been 'totally inappropriate'.

However, he is understood to be on an 'evergreen' two-year contract, which means that he is contractually entitled to receive two years' salary on notice. Last year, Mr Anderson, known as a company doctor, received a salary of pounds 476,000.

Talks with GEC on a number of options, including takeover, have been conducted on a regular basis since Mr Anderson took over at Ferranti more than three and a half years ago.

Mr Anderson's motives in recommending the GEC deal are being questioned by John Katz, chairman of the newly formed Ferranti Shareholders' Association, who claims to speak for the holders of at least 5 per cent of Ferranti's shares. In a letter to Mr Anderson this weekend, he asked: 'How neutral to the transaction are you?'. The letter went on: 'Shortly after the announcement of the token bid, you informed the press that no special arrangements had been made with you - and such arrangements would be out of place.

'While there is no suggestion that you have acted in any way improperly, it will clear the air if you factually describe your position in both the scenarios emerging as quickly as possible.

'Obviously you will be better off if you have a contract backed by a GEC-run Ferranti than a claim against a receiver. How much better off will you be?'

GEC's advisers declined to say whether the service contracts of Ferranti directors would be honoured. However, neutral analysts believe GEC will honour them if the deal goes through.

Mr Anderson is increasingly concerned by the influence of Mr Katz, who helped preference shareholders in Greycoat, the stricken debt-laden property company, achieve a 50 per cent improvement in terms in a similar rescue situation.

In that case, shareholders were presented with a take-it or leave-it offer from Postel but later achieved better terms from two South African investors.

'The Greycoat situation was completely different,' said the Ferranti chairman. 'There you were dealing with valuations of bricks and mortar. Our assets are our employees, and in a receivership situation they will look for new jobs.

'If we go into receivership, the whole thing will implode, and because of our defence interests there are a number of potential purchasers that might not get Ministry of Defence approval.'

The Ferranti chief included a bleak and tough message in the offer document that is being posted to Ferranti's 48,000 shareholders this weekend. He said, however, that it would be 'a tall order' persuading 90 per cent of the company's ordinary shareholders to accept GEC's terms at the extraordinary general meeting called for December 8. 'We would have an uphill struggle, even without Katz,' he said.

'Clearly the shareholders are not happy with this offer. Many of them consider it insulting, but we are absolutely clear that shareholders will get nothing out of receivership.'