Galloping into controversy around Findus

img, .hide-comment-buttons #singleCommentHeader .formContainer >.title, .hide-comment-buttons #loginButtonContainer display: none; /* Expandable MPU fix */ #side .x300 overflow: visible!important; /* Collapsing Skyscraper fix */ .ad div.skyscraper height:auto!important;padding:0px!important; .ad div#mpu.skyscraper height:600px!important; Galloping into controversy over Findus - Business Analysis & Features - Business - The Independent Sunday 04 January 2015



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Dry January Katie Hopkins Homeless Veterans Campaign George Osborne Greece Michael Gove News >Business >Business Analysis & Features Galloping into controversy over Findus
James Thompson James Thompson James Thompson is a business reporter at The Independent.
More articles from this journalist Follow James Thompson Tuesday 12 February 2013
Print Your friend's email address Your email address Note: We do not store your email address(es) but your IP address will be logged to prevent abuse of this feature. Please read our Legal Terms & Policies A A A Email When Lion Capital recently galloped into advanced discussions about buying the British hair-straightening brand represented Cheap GHD Straightener NZ by the pop star Katy Perry, the UK private equity firm had expected to be in the winners' enclosure eulogising about its latest deal.
But all that changed last week when Lion, via its investment in Findus Group, became embroiled in the "horsegate" scandal, which trampled over the news at the weekend that it had acquired GHD Hair Straighteners NZ - which stands for good hair day - in a deal valued at �300m
Findus was forced to withdraw its frozen beef lasagne, produced by the French firm Comigel, on 4 February after some samples were found to comprise up to 100 per cent horsemeat
For Lion - which has a 33 per cent stake in Findus - the horsemeat debacle is the latest chapter in a roller-coaster ride of investing in European and US consumer brands
On the downslope, Lion is arguably best-known for its ownership of La Senza, the debt-laden lingerie chain which it was sold out of administration to the Middle-Eastern retail group Alshaya in January 2012. Its stake in Findus was also reduced after a painful debt-for-equity swap last September
Somewhat controversially, Lion Capital has occasionally acquired subordinated debt in portfolio companies, such as La Senza and Findus, after buying their equity to make it the top secured creditor ahead of a restructuring, although this is not uncommon among private equity firms
On the upswing, Lion will justifiably point to handsome returns on exiting its investment in the luxury shoe brand Jimmy Choo in 2007 and its sale of breakfast stalwart Weetabix to China's Bright Food last year in a deal valued at �1.2b
Among its current investments, sources close to Lion Capital talk of robust performances at the French frozen food retailer Picard, North America's Bumble Bee Foods and the US http://tinyurl.com/ol6bujn tailored clothing firm John Varvatos. It also owns the outdoor chain Cotswold Outdoors and acquired the fashion retailer All Saints for a token �1 in 2011 after it took on its �100m-plus d
t. For Lyndon Lea, one of Lion's co-founders in 2004 and the main partner on Findus, horsegate led to colourful stories re-emerging from his p
t. For instance, he famously held a lavish party in 2010 that entertained 200 guests - including the elite polo player Adolpho Cambiaso - with a performance from Cirque du Soleil and sushi served on semi-naked women at his Californian beach ho
e. The former Goldman Sachs employee and experienced polo player, when asked which was his favourite pony, famously named seven hor
s. Mr Lea, 44, who is divorced and has two daughters, lives in Kensington but also has a place in Berkshire as well as a �25m beach home and a ranch in California's Santa Bar
ra. The multi-millionaire declined to comment yesterday but Lion suggested that Findus needed to be more open with the British public. A spokesman said it was "deeply concerned" that horsemeat had been introduced into the food chain. He added: "While we have been assured there is no health risk, we encourage Findus management to be timely and transparent in its communication with the British public in order to restore confide
e." For its part Findus, which was founded in Sweden in 1945 and acquired by Lion in 2008, said it was considering legal action against unnamed suppl
rs. Romanian officials are now looking into whether the horsemeat came from Romania. The French supplier Comigel appeared to suggest that it had been misled over the supply of horsemeat. Its director Erick Lehagre said at the weekend: "We were victims and it's now clear that the problem was not with Findus nor with Comi
l." A spokesman for Findus - the group behind Young's and The GHD Sale NZ Seafood Company - cited "suppliers' failure to meet contractual obligations about product integr
y". The Labour MP Tom Watson has suggested that Findus's beef lasagne may have been contaminated as far back as August, but the food company said it had only been aware of this possible timeline through a letter dated 2 February from Com
el. Findus also vehemently denied that horsemeat in its beef lasagne had anything to do with an efficiency drive related to its �220m refinancing last September, as it battled to avoid a restruct
ing. A spokesman said: "When the news on horsemeat contamination broke in the UK, Findus asked all its suppliers to do a full supply chain traceability review and subsequently pro-actively initiated DNA tes
ng." Whatever the outcome of the Findus investigation, Mr Lea is likely to have his leg pulled about horsegate at polo events for some time to
ome. Lion has told Findus it needs to be timely and transparent in its dealings with the British public