Doughty Hanson in £100m dispute

Bruce Roe, one of the original members of Doughty Hanson, is reportedly suing the UK-based buyout firm and its two founders because he believes accountant Price Waterhouse Coopers has undervalued his shares by £95 million.

A founding member of UK-based buyout firm Doughty Hanson has opened legal proceedings against his old company and its two founding partners in a share valuation dispute, according to a source close to the proceedings.

Bruce Roe, one of the five original members of Doughty Hanson, said his shares are worth around £104 million (€153 million, $205 million)and he is seeking an invalidation of the £9.3 million estimate calculated independently by big four accountant PWC, according to Financial News, a UK trade paper.   

Roe retired from the buyout firm last summer and he informed his partners he wanted to sell his 12,240 shares in September last year. PWC was called in to assess their fair value because the firm is not publicly listed. The accountant estimated they were worth £9.3 million.

The firm’s eponymous founders Nigel Doughty and Richard Hanson have been named as co-defendants. They had indicated they would purchase Roe’s shares at fair value, under the company’s articles of association.

Roe is challenging the accountant’s methodology and his court filing claims the estimate would “deprive the shares, and hence the claimant as seller, of about £95 million, or 90 percent of their value, which they should, and would, have been certified as having if the shares had been valued on the basis of the actual financial position and trading prospects” of Doughty Hanson in September.

Roe argues the accountant’s valuation provides Doughty and Hanson, as the buyers of the shares, with an instant premium of nearly £95 million. When he retired last year, Roe was the last remaining of the firm’s original team excluding the founders.   
Doughty Hanson declined to comment.