Family
Business Magazine E-Newsletter
December
17, 2007
Contents
1.
Forbes family divesting non-media holdings.
2.
Fifth-generation member forced out of Brown-Forman is now spirits
entrepreneur.
3.
Is Reuters deal a misstep for Thomson?
4.
CFOs can help family firms overcome crucial issues.
5.
Preview of Family Business Magazine's
Winter 2008 issue.
1. Forbes family divesting non-media
holdings. The Forbes family, who more than a year ago sold
a minority stake in Forbes Inc. to Elevation Partners -- an investment
group that includes U2 singer Bono -- has been selling off its
non-media holdings ever since. Keith J. Kelly of the New York Post reported that the
latest asset to go on the block is the Forbes Trinchera Ranch, which at
171,400 acres is the largest ranch in Colorado. The ranch, which Kelly
reported was sold to hedge fund manager Louis More Bacon for $175
million, had been acquired by late patriarch Malcolm Forbes in 1969.
Kelly also reported that the Forbes family had found a buyer for its
Manhattan headquarters, which the family had put up for sale in July.
"Our source said that the buyer is a developer who will allow Forbes
Media LLC to stay put as a renter for two years while it searches for
new headquarters," Kelly wrote. The family had hoped to get $145
million for the building but probably would have to settle for less,
the article said. In September, Kelly reported that the company had
sold its two corporate helicopters. (Sources: New York Post, Nov. 30, 2007;
Sept. 12, 2007.)
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to the top.
2. Fifth-generation member forced out
of Brown-Forman is now spirits entrepreneur. W.L. Lyons
Brown, 47, fifth-generation member of the family that controls $2.8
billion spirits company Brown-Forman, spent 17 years at the family firm
and was being groomed for succession. But Brown was forced out in 2002
after saying at a sales meeting that the sales team knew more about the
marketplace than the company's top managers, noted a recent article in Forbes. Family business consultant
Leon Danco told Forbes that
Brown's resignation under pressure "was the classic power struggle in a
family-controlled publicly traded business." Today, Brown has a
majority stake in edgy spirits company Altamar Brands, an importer of
Kubler, one of four brands of absinthe approved for sale in the U.S.
Brown's father, Lee Brown, who controls 10.4% of Brown-Forman's Class A
voting shares, has invested $300,000 in Altamar Brands, Forbes reported. (Source: Forbes, Nov. 26, 2007.)
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to the top.
3. Is Reuters deal a misstep for
Thomson? When Canadian information provider Thomson Corp.
agreed to purchase Reuters Group LLC in May, some analysts thought
Thomson was paying too much. Now Reuters' chief executive has warned
that sales in the next two years could be affected by market
turbulence, the Wall Street Journal
reported. "If the Reuters business goes into a downturn, Thomson's
share price would likely suffer," the article said. "It also would be
seen as a rare misstep for the Thomson family, which over 20 years has
transformed the company from a chain of regional newspapers into one of
the world's largest providers of business, scientific and legal
information." Thomson is 69% owned by its founding family through an
investment trust, the Journal
reported. (Source: Wall Street
Journal, Dec. 4, 2007.)
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4. CFOs can help family firms
overcome crucial issues. As a family business grows and
evolves into the second or third generation, with more family members
involved, its financial needs become more complex, and it requires an
experienced chief financial officer, writes family business adviser
Francois de Visscher in Financial
Management of Your Family Company. "This kind of CFO needs to
develop long-term financial plans for the business, identify the most
appropriate sources of growth capital, establish and maintain
relationships with banks and other funding sources, invest the
company's excess liquid resources in the most advantageous way, and
evaluate the various mechanisms for providing shareholder liquidity ...
while carefully safeguarding the financial resources needed to ensure
the long-term growth of the business." And the family business CFO
"must have a skill set that goes beyond financial acumen," the author
adds. "Particularly in later-generation companies, the CFO must often
navigate the treacherous waters between the liquidity objectives of
shareholders (both active and inactive) and the growth objectives of
the business. For this reason, he or she must be a keen listener and an
adroit communicator, and be capable of earning the trust of various
factions within the family."
For a further
discussion of the role of a CFO, and more advice on managing a family
firm's finances, see Financial
Management of Your Family Company. Learn more about the book and
view the table of contents here.
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to the top.
5. Preview of Family Business Magazine's Winter
2008 issue. Subscribers to the print edition of Family Business will receive their
Winter 2008 issues this month. The issue focuses on the need to accept
and plan for change, and highlights the stories of several family
companies that have succeeded in meeting the challenge. Included are
the stories of two couples who continued to work together as business
partners after divorcing and of a mother and son who are carrying on
the family firm after the death of the dynamic patriarch, as well as
advice on planning a new role for senior-generation leaders after they
relinquish the CEO's role.
Visit our
website for subscription information.
With our special Family Subscription rate, up
to 10 members of your business family can receive the magazine for one
discounted price.
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