SENIOR councillors have blasted a “crazy” decision to appoint a private company to run four core council services following revelations that it is facing down takeover bids.
Business consultancy Mouchel issued a statement on Monday confirming that a fall in its share value had attracted bid approaches from other companies.
Cllr Claire Smith, leader of the Bournemouth Borough Council’s Liberal Democrat group, said: “The warning signs were there, especially in the week leading up to the vote to go into partnership with Mouchel. My feeling then was that we were crazy to be doing it at this time, and the statement from Mouchel confirms my position.”
Mouchel’s statement came less than a week after it assumed control of Bournemouth council’s revenues, benefits, ICT, and facilities management services.
It said: “The company is in an offer period for the purpose of the City Code on Takeovers and Mergers and a further announcement will be made in due course. The board does not believe that these preliminary approaches reflect the true value of the company.”
Mouchel’s share price rose by 33.6 per cent to 75.5p yesterday, but remained 72 per cent lower than its value one year ago. In October, Mouchel announced a pre-tax loss of £14.7m. But yesterday it reported an order book worth £1.8bn, and an expectation that refinancing would be completed by next March.
The partnership with Bournemouth council is highly prized by both parties, who hope to slash annual costs by nearly six per cent, deliver top-quartile service performance, and create up to 650 jobs in Bournemouth.
Council leader Cllr Peter Charon said: “The contract includes a clause that if Mouchel is taken over the council can review the contract and decide if it wants to proceed with the new company. Obviously, if someone was to take over we could look them in the eye, and, if we didn’t like what we saw, we could take the whole lot back in house.”
