Deutsche big hitter to help Morgan Grenfell

Reports suggest that Sir Robert Smith will be sent in to resolve the dispute over losses at EMTV.

The Times reports today that Deutsche Bank is to send one of its senior executives to Morgan Grenfell Private Equity to resolve a dispute which apparently has senior executives at odds.

The newspaper reports that Sir Robert Smith, vice chairman of Deutsche Asset Management, has called a meeting with Morgan Grenfell chief executive Graham Hutton and Scott Lanphere, a director.

Morgan Grenfell Private Equity was to have undergone a management buy-out from Deutsche Bank last year but the deal was postponed indefinitely. The private equity arm’s losses at EM.TV were believed to be at the root of the decision. Morgan Grenfell sold its stake in SLEC, the Formula One racing company which is controlled by Bernie Ecclestone, to EM.TV in March 2000 for a 12.5 per cent shareholding in EM. As EM's share price collapsed, the firm was looking at a paper loss of several hundred million dollars. At the time, the loss was thought to represent more than 10 per cent of Morgan Grenfell’s $2bn European Partners IV fund which had invested in the transaction.

According to the newspaper, Lanphere opposed the EM.TV deal, whilst Hutton did not share his concerns. It is suggested that once the rift has been resolved, an MBO will go ahead.