Tarsem

"Tarsem and I finally signed a deal with Palmi on 24 November 2004 in the London flat of Arev’s John Scheving (like all the Icelanders we met, he had a swish flat in Chelsea overlooking Stamford Bridge). We would buy the Iceland business for a fixed £ 160 million. Best of all we negotiated to leave the pension deficit behind with Booker. We agreed to pay a further £ 20 million, phased over our first year in the business, to take us out of the BFG pension scheme altogether and make a fresh start. This was without doubt the best £ 20 million we have ever spent. We also managed to negotiate a shareholders’ agreement whereby no dividend could be paid or any refinancing take place without the consent of the management. We were frightened that Baugur might want to strip cash out of the business. Why they agreed to it I don’t know but they were pretty broad-brush in their approach and once the deal was agreed in principle they weren’t too interested in the detail, particularly where Iceland was concerned: they were focused on the big opportunities in the property portfolio and Booker. We also negotiated that if they ever wanted to sell the company we had the right to buy provided we could match the price. These conditions later proved to be worth their weight in gold."

"Tarsem and I finally signed a deal with Palmi on 24 November 2004 in the London flat of Arev’s John Scheving (like all the Icelanders we met, he had a swish flat in Chelsea overlooking Stamford Bridge). We would buy the Iceland business for a fixed £160 million. Best of all we negotiated to leave the pension deficit behind with Booker. We agreed to pay a further £20 million, phased over our first year in the business, to take us out of the BFG pension scheme altogether and make a fresh start. This was without doubt the best £20 million we have ever spent. We also managed to negotiate a shareholders’ agreement whereby no dividend could be paid or any refinancing take place without the consent of the management. We were frightened that Baugur might want to strip cash out of the business. Why they agreed to it I don’t know but they were pretty broad-brush in their approach and once the deal was agreed in principle they weren’t too interested in the detail, particularly where Iceland was concerned: they were focused on the big opportunities in the property portfolio and Booker. We also negotiated that if they ever wanted to sell the company we had the right to buy provided we could match the price. These conditions later proved to be worth their weight in gold."