Outlook: Slough/Bilton

THE PROPERTY sector is a funny old rag-bag of companies. Many of them don't deserve to be separately listed entities at all, the original entrepreneur and driving force having long since departed, leaving a collection of disparate properties run rather in the manner of a gently declining family estate. And yet there they all are, with their highly paid boards of directors, poshed-up Mayfair head offices, and army of shareholders to support. Consolidation is not a word these companies seem even to recognise, let alone want to hear.

Bilton is one such enterprise, though to be fair, the company is based in sunny Ealing, not Mayfair. The original founder, the gloriously named Percy Bilton, passed away many moons ago, leaving the enterprise in the hands of Ron Groom, the present joint managing director. As a trustee of both the Percy Bilton 1954 Settlement and the Percy Bilton Charity, which together own 34.7 per cent of Bilton PLC, Mr Groom maintains an apparently unassailable grip on the company, despite the fact that he doesn't appears to be a beneficiary of either.

In fact, the actual beneficiaries, members of the original Bilton family, would over the years have done much better if they had stuck their nest egg into unit trusts. Belatedly, some of them have begun to realise this, partially opening the door to the present pounds 264m hostile takeover bid from Slough Estates.

Slough has been complaining about what an atrociously run company Bilton is. Its financial strategy has been "inappropriate" and its approach to new development "misguided", Slough said in another broadside yesterday. More seriously, it in effect accuses Mr Groom of using his position as a trustee of the family interest to run the company as a personal fiefdom.

It ought to be pointed out that Slough itself is not entirely without blemish in this department. Sir Nigel Mobbs, executive chairman, is the grandson of the original founder, Noel Mobbs, so Slough Estates is a property dynasty too. Even so, in recent years it has been a good deal more successful than Bilton; under Sir Nigel it has become a big, well managed, serious company with a strong investment following. The same cannot be said of Bilton, which seems to have been run without a great deal of concern for the interests of outside shareholders.

The Bilton family trust and the parallel charity will be concerned to ensure that Slough pays a full price, but they'd be foolish to stay with the present set-up. And Slough is of course absolutely right to say that Mr Groom has a terrible conflict of interest.