Yardley in a Lather

In its deepening economic chill, Britain has been swept with merger fever. Over the past few months, major deals have been made in aircraft and steel. Others are afoot in chemicals, electronics, autos and oil. But when the giant London-based British-American Tobacco Co. Ltd., joined in with a bid for Yardley & Co. Ltd., one of Britain's biggest and best-known perfume and cosmetics makers, all it got was a lather of dissent.

Rich (assets: $1.5 billion), acquisition-minded BAT is no stranger at the dressing table, having acquired 65% control of another cosmetics company, Lentheric Ltd., in 1965. Two weeks ago BAT made a generous $67 million cash offer to take over Yardley and promised to expand the company "on an international basis, while keeping its management team."

For BAT, the proposal made eminently good sense. With scores of brands--ranging from Kools and Viceroys in the U.S. through its Brown & Williamson subsidiary to Tom Toms in Malawi--on sale in over 150 countries, BAT is the world's biggest, most profitable (1965 earnings: $230 million) tobacco company. But BAT needs a sizable British business to help balance highly taxed foreign earnings (it sells no tobacco in England) and, not least, to ensure its growth against a leveling off of tobacco sales because of the health scare.

The offer seemed irresistible--to everyone except Yardley's oligarchical Gardner family, which bought out the Yardley's in 1883, carefully kept a ruling majority of the voting stock when the company went public in 1920. Least flattered by the BAT bid: Yardley Chairman T. Lyddon Gardner, 62, second generation of the family to head the firm and patriarch of a third generation coming along the company's ranks. Last week, after huddling with Yardley's bankers, N. M. Rothschild & Sons, Gardner urged stockholders to ignore BAT's tender offer. "We are going into battle," he vowed. "I don't see any connection between tobacco and perfumery."

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