Blog: Private equity meets the press pack
Dean Best | 3 July 2007
The private equity owners of UK biscuit maker Burton’s Foods have today (3 July) looked to fight the flak aimed at the sector with an unprecedented move to meet the media.
Duke Street Capital, which faced criticism from food industry circles after announcing a swathe of redundancies at Burton’s in May, has held a press conference to discuss its business.
The move comes as private equity groups are under fire from sections of the media, trade unions and even politicians. In recent weeks, private equity bosses have been hauled in front of UK MPs to answer pointed questions and shed some light on an industry criticised for his lack of openness.
Moves like this are just what private equity needs. The sector faces charges of asset-stripping and piling huge amounts of debt on the businesses they acquire – and then selling them on for huge amounts of money.
While there may be some truth in that, private equity can be a force for good in revitalising struggling businesses. The central problem right now is that the industry, for so long used to operating – and perhaps thriving - within a secretive environment, has been unable to get that more positive message across.
Critics of private equity point to the lack of accountability on the practices of private equity, claiming jobs and businesses are in danger when owners are not answerable to shareholders. Something of an irony given that, in times gone by, it was the big, bad multinational in the sights of angry unions.
Private equity needs to go public to give it a fighting chance of riding out this current storm of public opinion.
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