Robert Holmes à Court

• 1. Introduction

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  Robert Holmes à Court built Australia's first billion-dollar private fortune starting from virtually nothing, and he did it in less than two decades. By the time the stock markets of the world collapsed in October 1987, his diversified resources and media empire was estimated to be worth around A$2 billion. Then, just three years later, on the morning of the 2nd of September 1990, he died in bed of heart failure. He was 53 years old.

  What kind of man assembles that kind of empire so quickly? What methods did he use, and how did he manage to profit even from the bids he lost? And what happened to everything he built when it all came apart around him? Those are the questions this documentary will answer.

• 2. School, Law, and Perth

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  Michael Robert Hamilton Holmes à Court was born on the 27th of July 1937 in Johannesburg, South Africa. His father was Peter Worsley Holmes à Court, and his ancestry stretched back to William à Court-Holmes, the 2nd Baron Heytesbury. He spent much of his early childhood in Southern Rhodesia before attending Cordwalles Preparatory School and then Michaelhouse School in Natal.

  At school, Holmes à Court showed an early instinct for turning a situation to his advantage. He photographed his classmates and sold the prints back to them. He also drove fellow students home in exchange for their travel allowances. These were not large sums, but the instinct behind them was the same one he would later use on much larger stages.

  He studied forestry first, at the University of Auckland and Massey University in New Zealand, graduating with a Bachelor of Agricultural Science in 1962. Then he moved to Perth, Western Australia, in 1961 to study law at the University of Western Australia, earning his Bachelor of Laws in 1965. He married Janet Ranford, a science teacher, on the 18th of May 1966, and was admitted to legal practice on the 17th of April 1968. His Perth law practice was sometimes conducted in partnership with Nicholas Hasluck.

• 3. An Accidental Beginning

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  Holmes à Court entered the corporate world by accident in 1970, when his law firm was asked to act as administrative receiver for a struggling publicly listed business: Western Australian Worsted & Woollen Mills, also known as WA Wool. The company was the single largest employer in the regional city of Albany, and it was in serious trouble.

  He found a way to invest $500,000 in the ailing mill, on the condition that the Minister for Industry, Charles Court, would persuade the Western Australian Government to forgive the $500,000 in loans it had made to the company. The source of Holmes à Court's initial funds was never fully established. The $75,000 deposit for the WA Wool shares came from a bank account shared with his law partners, who then asked for repayment. One strong possibility is that his mother Ethnee provided the money. She had inherited from her mother Florence, who in turn stood to inherit from her second husband H.R. Cumming, a wealthy Rhodesian landowner and associate of Cecil Rhodes. Ethnee had also run and sold both a riding school and a game lodge in Chobe, and had sold investment properties, handing the proceeds to Robert when she emigrated to Australia in 1967.

  Once he controlled WA Wool, Holmes à Court set about making it competitive. He reduced production costs by installing modern machinery, acquired on favourable terms from a leading Belgian equipment manufacturer eager to break into the Australian market. He now held a company listed on the Australian Securities Exchange. From that foothold, he began acquiring a string of smaller businesses, including Westate Electrical Industries.

• 4. The Bell Group Machine

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  In 1973, Holmes à Court's company acquired Bell Brothers, a well-known West Australian transport and contracting group, for $9.6 million through a reverse takeover. Bell Brothers would become The Bell Group Limited, his flagship vehicle for the next decade and a half.

  Bell Group built up media holdings including the Albany Advertiser, the Katanning Weekly, the Great Southern Herald, the Collie Mail, and radio station 6VA. It also pursued a series of bids that failed to succeed but almost always returned a profit. An unsuccessful run at Ansett Transport Industries in 1979, which was ultimately defeated by Rupert Murdoch and TNT, still delivered Bell a profit of $11 million. A failed bid for Elders Goldsbrough Mort in 1981, launched at $120 million, returned a profit of $16.5 million. This was the distinctive logic of Holmes à Court's approach: he forced targets to fight back so aggressively that share prices rose, leaving Bell holding inflated stock it could then sell.

  By the end of 1980, Bell Group had accumulated cash reserves of $100 million. In 1982, Bell took a 4% stake in Rolls-Royce and then acquired TVW Enterprises, owners of television station TVW-7 in Perth and SAS 10 in Adelaide. Bell also acted as a white knight in defeating a £1.9 billion hostile takeover bid from Lloyds Bank against Standard Chartered Bank.

  Also in 1982, Bell acquired Lew Grade's UK-based Associated Communications Corporation in a boardroom coup. Through that deal, Bell gained control of ATV Music, which held the publishing rights to Beatles songs through a company called Northern Songs. Holmes à Court eventually sold ATV Music Publishing to Michael Jackson. As part of the deal, he persuaded Jackson to make a brief visit to Perth to appear on Channel 7's annual Telethon.

• 5. Bell Resources and BHP

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  In 1983, Bell Group bought a Perth mining equipment company called Wigmores and renamed it Bell Resources Limited, or BRL. Through the ACC group, BRL gained control of Weeks Petroleum, which owned a 2.5% royalty share in the Esso-BHP Bass Strait oil and gas consortium.

  By 1985, BRL had spent $140 million to acquire 13% of U.S. mining company Asarco. That same year, BRL made its most audacious move yet: a bid for BHP, Australia's largest company at the time. Before the deal could be finalised, Elders IXL stepped in and took a 20% stake in BHP for $2 billion, with BHP buying $1 billion in Elders preference shares in return. That transaction later brought corporate regulator action against Elders executives including chairman John Elliott. BRL also spent US$800 million to acquire 9.6% of Texaco stock.

  In 1987, Bell Group purchased a stake in Pioneer Concrete and made a second unsuccessful attempt to acquire the Herald & Weekly Times group. That bid ultimately went to Rupert Murdoch for $1.8 billion. Bell Group did acquire The West Australian, Perth's main daily newspaper, and Holmes à Court's horse Black Knight had won the Melbourne Cup in 1984.

• 6. The Crash and the Unravelling

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  When the October 1987 international stock market crash arrived, Bell Group held assets that were valuable on paper but not generating enough revenue to cover its debts. Holmes à Court's family company, Heytesbury Holdings, owned 43% of Bell Group, which in turn owned 40% of Bell Resources, the cash-rich subsidiary. The problem was that Bell Resources could not simply buy its parent to free up that cash. Share raids were being conducted against Bell Resources by Kerry Packer, by the Adelaide Steamship Company under John Spalvins, and by IEL under Ron Brierley. Meanwhile, Merrill Lynch withdrew its $1 billion line of credit, cutting off the path Holmes à Court needed to move the money.

  He initially sold some Perth properties before accepting a joint takeover by Bond Corporation and the State Government Insurance Commission, each taking a 19.9% stake in Bell Group. Holmes à Court retained 6% and received $340 million from the sale. Bond Corporation was then forced to bid for additional Bell shares, eventually acquiring a majority stake of 68%. What followed was destructive. Bond Corp stripped $500 million from Bell Resources in an attempt to prop up its own debts. The asset stripping ultimately sent Bond Corporation's chairman Alan Bond to jail for breaching company law. TVW-7 was transferred into Bond Media, and other assets were disposed of.

  During 1988, Holmes à Court shifted his energy to rebuilding Heytesbury's subsidiaries, acquiring Stoll Moss Theatres in London, the Sherwin Pastoral Co with its vast cattle stations in northern Australia, and the Vasse Felix winery in Margaret River. In 1989, Heytesbury added Victoria River Downs and more Sherwin Pastoral stations. He also traded in Jaguar stock, as well as Christie's and New Zealand media group Wilson & Horton.

• 7. Death and What Followed

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  Holmes à Court was a heavy smoker who also suffered from diabetes. He died of heart failure in bed on the morning of the 2nd of September 1990 at the age of 53. He left no will. Under the rules that applied in the absence of one, his estate was to be divided with one third going to his widow Janet, and the remainder split equally among their four children: Peter, Paul, Simon, and Catherine.

  Janet Holmes à Court managed Heytesbury Holdings from the time of her husband's death until her retirement in 2005. She was, at one time, Australia's richest woman. Heytesbury continues as one of the largest private companies in Australia.

  The children took separate paths. Peter Holmes à Court, after selling his share of Heytesbury for a reported A$35 million, became a major investor and entrepreneur. He is, along with actor Russell Crowe, a 75.8% owner of the National Rugby League club South Sydney Rabbitohs. Paul Holmes à Court has since become chief executive of Heytesbury. Simon Holmes à Court became an academic focused on the environment and climate change, and founded the climate fund Climate 200. Holmes à Court's mother Ethnee, whose funds may have made his first corporate move possible, died in May 2014 at the age of 98.