The Odd Couple Running A Health Care ColossusEric Schine
Timothy M. Aitken and Jeremy M. Jones are a study in contrasts. Aitken, 50, is a flamboyant British investment banker who has bullied and scratched his way through dozens of deals in several industries. Jones, 53, a bland and buttoned-down Midwesterner, has toiled away quietly for the past 25 years in the health-care business.
The question now: Can these two opposites get along? They're betting yes. On Mar. 2, Jones, chairman of Homedco Group Inc. in Fountain Valley, Calif., and Aitken, chairman of Abbey Healthcare Group Inc. in nearby Costa Mesa, announced a merger that will create the largest player in the rapidly expanding business of providing health care at home. The merged company will have $1.1 billion in sales and 470 branch offices in 48 states. Jones will be CEO; Aitken will be his No.2. Wall Street believes they can make a go of it: Abbey's shares jumped 24%, to about 35, after the deal was announced; Homedco's are up 20%, to about 52.
Jones, nonetheless, might be worried about his future. Since moving to the U.S. in 1991, Aitken has pulled Abbey from the brink of bankruptcy by refinancing the company and buying up competitors. But along the way, he has hired, fired, and bitterly fought with a succession of high-level managers.
A MISFIRING, TOO. All told, at least six suits are pending against Abbey or Aitken, including actions by Victor M. Chaltiel, Abbey's former chief executive, whom Aitken fired last February, and former Chief Operating Officer Michael C. Miller, fired by Aitken last May. Chaltiel did not return calls seeking comment. Miller's lawyer, Joel W. Baruch, says Miller was fired for complaining about a previous Abbey acquisition. Aitken says Miller was fired for poor performance.
More recently, there was the bizarre case of Jerilyn P. Asher, president of Abbey from July to December of 1994. In a series of public announcements, Abbey first asked Asher to step down on Dec. 14, after she complained to reporters about alleged accounting irregularities at the company. The following day, however, the company said it had "canceled its request" for Asher to leave. Instead, Abbey explained, Asher would stay on to help with new-business development. Moreover, Asher agreed to retract her statements. She declined public comment for this article.
Aitken brushes off the suits. "What's $2 million or $3 million in settlements compared to $50 million in savings from the [Homedco-Abbey] merger?" he asks. Besides, he says, "I've gotten the boot three times myself. It's extremely unpleasant."
Easy for him to say. As he often mentions, Aitken was raised by his grandfather, British media tycoon and Cabinet member Lord Beaverbrook. He grew up on an estate near London and summered at the family's place on the French Riviera, where the likes of Winston Churchill and Greta Garbo came to dinner. But Aitken insists he "was not really raised with a silver spoon at all," because he "got nothing from my grandfather, just $150,000."
Aitken started out as a cub reporter for London's Evening Standard, one of his grandfather's papers. He then worked briefly for the British brokerage firm Rowe & Pitman Ltd. but was told, Aitken says, that "I didn't fit in." Later, he formed an investment company and hired his cousin Jonathan Aitken, who currently serves as Britain's Treasury Chief Secretary. Aitken says he was dumped from the partnership after he and his cousin got into a dispute over investment strategy: "I didn't talk to him for five years."
SHORE LEAVE. To soothe the sting, Aitken embarked on a sailing race from the Canary Islands to Barbados. Then, the Abbey post came up after another cousin, who happened to be on Abbey's board, suggested Aitken for the job.
At Abbey, Aitken seems to relish a good spat. Legal squabbling aside, for instance, he and Chaltiel feuded over everything from the size of their offices to the pace of Abbey's expansion. To this day, Aitken loves to show guests press clips from the Chaltiel fight and other disputes, nicely framed, hanging in the downstairs bathroom of his waterfront Newport Beach house.
Jeremy Jones asserts there will be no more soap operas at the merged company. "From now on, I'm in charge of the corporate culture of this company," he says. And Aitken insists that he's "too old for any huge new fights." Besides, he plans to spend more time on his 53-foot yacht. For Jones, perhaps the longer Aitken is at sea, the better.
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