I haven’t done a business case in a while. My employers do know about my blog and at the beginning I had to agree to ensure nothing identifiable was used. A lot of what I’m doing at the moment would point straight to me, so I’ve had to keep mum. Still, one interesting development on something I’ve talked about before, so a divergence today.
I’ve spoken before about the sale of a certain subsidiary. The story has been long and convoluted since then. The sale has been managed in an interesting fashion by the chappy in charge, and one of the other key stakeholders in the company (my peter principle proof) has regretfully departed the company (ehaaa!). All of these contributed to a sorry state of affairs.
The supposed buyer of the subsidiary strung us along for months, first asking for this detail, then that change, then this extra little bit of money. Our CFO, desperate for the sale, kept agreeing. Then, a little while ago, just at the point the stock markets went all jumpy, the buyer pulled out. A little detail of having to raise money by issuing stock got in the way. Their stock price had a little fall and they couldn’t raise the money.
These things happen, and if we’d managed the more effeciently, it would have been closed back in the autumn. Instead it stretched on and on and the buyer was left a way out.
This wasn’t necessarily bad news. In buying the business, they would have been buying a certain rather rich contract with ourselves. If their future was so uncertain as to provide as rocky a stock price as they had, all was probably not well.
The thing is, now what do we do? Corporate sales are rather like medieval weddings. Jilted brides are somehow “tainted”, however unfairly. A suspicion lingers that if one bridegroom ran away, there must be something wrong with the bride. We were selling the company because we felt it wasn’t a strategic fit with our core business, and that we as a senior team didn’t have the right skills to manage it correctly (not far off, having me as the sole skill set in the company with the right knowledge leaves a single point of failure, and leaves the other execs in uncertain waters when making decisions).
So, options are limited:
- Close down the business to external clients and take in the bits important to us as an internal department. The financial risk is reduced, but we’re still left managing something we’re not comfortable with. Also, the PR risk of turning away other clients is not inconsiderable.
- Immediately look for another buyer. Though nothing has been made public, the sale and the jilted bride effect is generally known in the market. There aren’t hoards of buyers sitting out there, and we’d be unlikely to get a very good price. However, it would get the future financial and management risk out the door.
- Continue to run the business as a subsidiary for a while, until market rumours are stilled, then attempt a sale. The risk is continuing to run the business. Staff have heard the rumours, moral is low, the management team disheartened and likely looking elsewhere.
What would you do? Remember, in all this there is the staff to keep in mind, not just the business risk to the parent.