Lord Keith of Castleacre

Lord Keith of Castleacre Merchant banker and industrialist

Born: 30 August 1916, in Norfolk. Died: 1 September 2004, in Norfolk, aged 88.

KENNETH Keith was a controversial figure who set in train major changes in the rather cosy world of banking in the Fifties. He not only aggressively expanded a small merchant bank (Philip Hill) into a major city player but also revolutionised the whole business of mergers and acquisitions. He floated companies on the Stock Exchange with an almost cavalier attitude, which upset the city traditionalists. At one time, the Bank of England mentioned to Keith’s board they expected to see "some changes in the sort of policy issue business previously followed by Philip Hill". Typically, Keith, always combative and full of energy, carried on regardless.

Keith was an ambitious and charismatic character who enjoyed the excitement and challenge of big deals. He was undoubtedly ambitious, arrogant and feisty but when he was representing you in a bid he would fight tooth and nail on your behalf. In the Sixties, he upset the City establishment when he merged his bank into a huge conglomerate and handled a series of massive takeovers for the likes of Charles Clore and Frank Cotton. In truth, Kenneth Keith inspired loyalty and suspicion in equal proportions.

Kenneth Alexander Keith was the son of a Norfolk farmer and attended Rugby School. He then went on to study accountancy. After qualifying, he was called up into the Welsh Guards and saw action in Africa and Italy. In the final years of the war he rose to lieutenant colonel and was appointed to General Eisenhower’s staff.

In 1946, he joined the small family bank of Philip Hill (their office was not even in the City) and succeeded in transforming the business within just a few years. He had an unremitting drive and ambition about him that wanted to succeed and when, in 1951, he proposed a merger with another bank - Higginson & Co - Keith was viewed by many of his colleagues and peers as something of an upstart. All this did was to fire Keith on to even greater challenges.

It was the era of the first Stock Market post-war boom and Keith was adept at spotting companies that would benefit from a flotation or had underused assets. He helped Charles Clore expand British Shoe and then represented him in the hotly contested bid by Sears Holdings for Selfridges in 1966. Keith became recognised as the takeover guru in the City and was hugely instrumental in the rationalisation of the brewing industry.

But he also wheeled and dealed closer to home. In 1964, he bought another merchant bank Erlanger & Co (giving the company the somewhat pedestrian title of Philip Hill, Higginson and Erlanger). In 1965 came another major confrontation with the City elite. Protracted merger talks led to Keith buying the long-established bank M Samuel (bankers to Shell, ICI and a host of blue chip companies) and Keith had an uneasy relationship with many of his more traditional new colleagues. Indeed, Roy Jenkins (then Chancellor of the Exchequer) intervened and moved Lord Melchett to British Steel to stave off a boardroom battle.

Thus was born Hill Samuel, a powerful and diversified City bank. Any criticism from others never deterred Keith. He had a single-minded vision of what he wanted to achieve and had a very clear idea how to achieve it. Indeed, he almost built up an investment house akin to the vast empires now seen in the City. Keith bought the shipbrokers Lamberts and the insurance giant Noble Lowndes in the Seventies with a view to creating a complete financial operation.

However, his ambitions were thwarted in 1973 when he failed to buy both the property company MEPC and Slater Walker. The latter was the creation of the City’s whizz-kid of the era, Jim Slater. His unit trusts and share buying was watched with an avid attention by brokers and investors. It seemed unlikely that two such powerful autocrats would ever blend round a boardroom table and the merger floundered in some acrimony.

Keith remained adamant that expansion was vital: he tried to sell Hill Samuel in 1980 to the US giant Merrill Lynch but somehow forgot to mention the matter to his board. That floundered rapidly. He spent much of his time in a palatial suite in St James’s Square, as chairman of Philip Hill Investment Trust and Rolls Royce. There, too, he was involved in controversy, as the Heath government had nationalised the ailing car manufacturer. But Keith improved the international sales force for the cars successfully and greatly improved exports. He resigned in 1980.

Because of his alert financial brain, Keith sat on the board of a host of quoted companies and served on many economic councils. He was knighted in 1969 and became a life peer in 1980. Keith was married three times. His marriage to Lady Ariel Baird was dissolved in 1958 as was that to Nancy Hayward in 1972. In 1973, he married Marie Hanbury who survives him, as do twins from his first marriage.

ALASDAIR STEVEN