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The corridors of power

Think about it. You’re just another company chairman, bumbling along, drawing a massive salary and trying to get through the year without attracting too much attention. Then someone like Jon Moulton comes knocking on your door.

This pretty well describes the experience at UK Coal, formerly known as RJB
Mining.

Most people will have worked out that UK coal mining hasn’t got much of a
future.

But there is huge value locked away in all those former collieries and
brownfield sites. Someone like Moulton does the sums, strips out the emotion,
and sees the potential in taking over the company and flogging off property
assets. Not surprisingly, UK Coal’s directors have not taken kindly to his
proposals.

Moulton is the guy who tried to buy MG Rover from BMW five years ago. One
suspects that he would have made a better job of things than the Phoenix Four.

But Moulton is not the only investor on the prowl for undervalued assets.
Another to resurface recently is my old friend Andrew Regan, last seen at
Snaresbrook Crown Court in 2003, where a jury cleared him of bribing two Co-op
directors to swing him favourable supply contracts.

Newspaper reports recently linked Regan to a possible tilt at Royal &
SunAlliance.

Whether this comes to anything or not, his advisers say that he is definitely
looking at a comeback, and is studying companies whose market price appears to
be below what the company is really worth. The closer the share price moves to
‘par’, the less attractive the deal.

It’s another world to me – but it’s the kind of thing that men like Moulton
and Regan thrive on. Shareholders of undervalued companies could have a lot to
thank them for, too.

Jon Ashworth is business features editor at The Times

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