Merger lands Saga FD £50m

Stuart Howard, the FD of SAGA, is set to scoop an estimated £50m jackpot when
the financial services group merges with the AA.

The merger was bankrolled by a £4.8bn refinancing deal which included £1.4bn
from the two organisations’ private equity owners, a SAGA spokesperson said.

After paying off about £3bn of borrowings, it is believed that the remaining
balance will be divided between shareholders, boosting the value of Howard’s 4%
stake by about £50m.

The huge rewards from the deal have reopened fears about private equity and
growing inequality. The confusing nature of the deal has also raised questions
about transparency, currently the subject of a review.

Separately this week, the DTI said that it was pressing ahead with draft
regulations to ensure companies report how directors’ pay increases compare to
those of shopfloor staff.

The moves will mean companies could report how the rates of increase compare
and why. The suggestion follows condemnation of huge pay increases for
directors, even where companies have floundered.

The draft regulations will now be drawn up and further consultations will
take place. The issues have already been consulted on as part of the
implementation of the Companies Act document released earlier this year.