What's in store for Selfridges?

GALEN Weston is reckoned to be the closest thing to royalty in his native Canada. Not bad for a commoner billionaire who lets it be known that he shares a life-long love of polo with Prince Charles and keeps not one, but two houses in Windsor.

The home-away-from-home in Britain for Selfridges’ possible new boss is Fort Belvedere in Windsor Great Park, a princely pile that was once the abode of Edward VIII and where he officially sealed his abdication because he loved American-born divorcee Wallis Simpson. The other Windsor residence is a 416-acre lush island of that name in Florida that he set up in 1989 as a playpark for the super-rich who love to live royally.

The gated-compound offers residents croquet lawns, beaches, golf clubs, a village and, of course, polo. If that’s not enough, there’s also Weston’s wife Hilary, daughter of a Dublin appliance salesman and a former cover girl whom he met and courted while setting up a chain of self-service groceries in Ireland. Hilary spent five years as Ontario’s lieutenant-governor, the Queen’s representative in the Canadian province, about as royal as it gets for a colonial.

But the interest on the other side of the Atlantic this week is whether Weston will soon be easing himself into the throne at one of Oxford Street’s glitziest palaces of shopping. At this stage it looks likely. The management of Selfridges has said it had accepted his bid, which values the company at 598m. It may not be the last bid: Aletheia Partners, headed by the British investor Robert Tchenguiz, has said he might make an offer. But if Selfridges’ shareholders accept the Weston offer, they will get 387p a share in cash and a dividend of 5.25p a share payable on May 30. The combined value of 392.25p a share is a 60% premium over Selfridges’ closing price on April 8. Analysts described it as a "very full price" and doubted whether anyone could trump it.

Weston, 62, who did not turn his inherited millions into billions without an eye for a bargain, made his bid through his private investment company, Wittington Canada. Britain’s department stores have recently been one of the hottest items on sale for global entrepreneurs as their stock fell so low that they became valued below the level of their assets.

But for those more interested in Debretts than credits and debits, the latest move by Weston could resolve an intriguing rift that has divided - some say saved - a retail family dynasty. Success for family businesses, as with royal families, often depends on getting along well with your relatives and keeping control over potential mavericks. The occupants of the other Windsor know a thing or two about that. Just consider what fellow Canadian Edgar Bronfman’s disastrous digression from the drinks business into - and then out of - Universal Studios has done to the mood of his family get-togethers and the wealth of current and future generations.

Granddad George Weston was the son of a cockney who settled in Canada in the 19th century and set up a Weston’s Model Bakery where he literally - and figuratively - set about making the family’s dough.

His reputed catchphrase - "People will eat horseshit if it has enough icing on it" - was not enough to sink the nascent empire that his son, Garfield, set about building into a multinational conglomerate.

The family business returned to Britain in 1934 and followed the former British empire into the US, Australia, South Africa and Ireland. By 1939, it had 30 British bakeries and introduced low-price tea biscuits, previously a luxury only afforded by the middle classes.

When Garfield took a controlling stake in the Queen’s grocer, Fortnum & Mason, in 1951, it caused a stir to rival Mohamed Al Fayed’s takeover of Harrods in 1985.

With the profits, came the pressure. Garfield’s irascible manner and driving ambition caused the family to split in two with his son Garry, who died last year, taking over Associated British Foods (ABF) while Galen looked after North America and Ireland.

While in some situations the divide could have been fatal to the family’s collective fortunes by creating a slowly decaying network of financial fiefdoms, the Weston brothers’ divergent personalities complemented the business. Garry is as well remembered for his frugal habits and quiet industriousness as Galen is known for his love of luxury and high society.

During the 30 years Garry ran Associated British Foods, its value grew from 140m to more than 4bn, helped no doubt by the introduction of the Wagon Wheel biscuit. A billionaire and one of Britain’s leading philanthropists, he would cut his children’s hair to save money, sacked his chauffeur, drove a second-hand Merc and would often be seen taking the bus to Fortnum & Mason. He explained his parsimony by saying: "I have to sell 10 loaves to make a penny. You cannot afford to be extravagant."

Guy, the eldest of Garry’s six children, currently runs the UK division of the business. Galen was briefed to expand the business on both sides of the Atlantic and was sent to Ireland to start a chain of self-service supermarkets. When his father died in 1978, Galen set his sights on transforming George Weston Ltd into one of Canada’s biggest food and supermarket groups, sold several extraneous businesses and turned the operation around.

The high profile has not been without its problems. In 1982, Hilary and Galen Weston were the target for a violent kidnap attempt by the IRA in Ireland, foiled by police after a tip-off. A machine-gun battle left the four gunmen seriously wounded.

Galen is currently chairman of Wittington Canada with a 62.5% stake in George Weston and has a controlling stake in Loblaw, Canada’s largest supermarket operator and leading wholesale food distributor. He also controls luxury department chains in Canada and Ireland and expanded in the US by acquiring BestFoods Baking. There is also a salmon business in Canada, which was once given an award by Greenpeace for being "number one salmon destroyer".

His personal wealth is estimated to be around $6bn, making him one of Canada’s wealthiest men. These days he prefers tennis and golf to polo.

Galen’s last big deal was the 1bn acquisition of the US bakery business from Unilever in February 2001. While he sits on the board of Fortnum & Mason, the bid for Selfridges is his first successful push into the UK retailing market. The deal’s timing, the sprawling range of family interests, the chances of economies of scale and the growing pressure for a succession of corporate control to the next generation could create some intriguing scenarios.

Garry’s six children are well-ensconced in the family business with Guy, 42, the eldest son, chairing the Weston UK family company, Wittington Investments; his brother, George, 39, is deputy chairman of ABF. Galen has two children, Galen Jnr - known as G2 - and Alannah, both expecting to play a role commensurate with their familial interests in Ireland and North America.

With that many family members working in the company, or owning its shares, it could be difficult getting everyone to sing off the same balance sheet; next time the fruits of division might not be so benign.

Galen’s attempt to get a foothold in British retailing one year after his brother’s death could yet prove to be the basis of an attempt to build bridges within the family and put the fourth generation of the Weston dynasty in order - while there is still time.