How to tell who’s boss after a merger

‘Merged’ firms’ board make-up and partner status show who really took over who

Leaders retaining their management positions and holding onto the firm’s name are usually seen as signals that a business is not being taken over. But those negotiating mergers might look elsewhere for the real sign of a surrender to a predator.

Thomas Eggar’s £42m merger with London’s Pritchard Englefield, sealed in a vote just before Easter, leaves little doubt about which is the dominant party. As well as keeping its name Thomas Eggar will retain its management structure, with managing partner Vicky Brackett in charge of a 10-person board containing the legacy firm’s boss, personal injury specialist Ros Ashby, as its only representative.

The London firm’s five equity partners apparently threw themselves into the deal: they were all involved in the negotiations – so much so that no formal vote was needed. Yet 40 per cent seem to have agreed a status change: of the five, only three will hold equity in Thomas Eggar, with two becoming fixed-share partners.

This echoes the position of around a third of McGrigors’ equity partners who, on joining post-merger Pinsent Masons, were made ‘transitional’ partners, meaning full equity status was not guaranteed for the first two years after merger.

And DWF’s pre-pack purchase of Cobbetts, a very different kind of deal, sees the latter’s owners barred from the buyer’s equity for at least 12 months and locked in for two years.

Now that is proof of a true takeover.