View from City Road: Bitter taste at Mrs Fields

MRS FIELDS Cookies' exit from the stock market is as ignominious as its entry in 1986, when 85 per cent of the shares were left with the underwriters. But the symmetry offers little comfort to the mostly private British shareholders, who have been waiting 17 months since the shares were suspended for news about the future of their company.

The news is as bad as they could have feared. Their 19.1 per cent stake is to be diluted to just 2.4 per cent. The banks are swapping their dollars 96m ( pounds 68m) debt and accrued interest for 79.1 per cent of the shares plus dollars 50m of loan stock. The quotation on the Unlisted Securities Market is to be withdrawn, removing what little chance shareholders had of realising some of their investment.

Perhaps most galling of all, however, is the position of Debbi Fields and her husband. While the stake held by her family trusts is cut from 81 per cent to 8.4 per cent, she will remain with the group as 'chairperson'. She has taken a dollars 150,000 salary cut, but is still being paid dollars 450,000 plus the possibility of an extra dollars 150,000 a year if debt is cut below certain levels. Randy Fields is receiving dollars 150,000 a year until 1994, despite having resigned as president last March. As part of the restructuring, he is sacrificing dollars 25,000 of that a year.

They have also been granted options, exercisable until September 1999, that could give them back 70 per cent of the company. The terms - the debt plus the par value of preference shares, increasing by 9 per cent a year - are demanding and other shareholders would have to be offered similar terms. But that still looks an over-generous award for a couple whose version of the American dream turned into the British investor's nightmare.