The inside story of a collapsed merger

Holiday surprise

In fact, to say everything was called off at the eleventh hour is probably underselling things. As far as Ms Nanda was concerned both Genesis and Thames Valley’s boards had separately agreed to sign off the merger. All that remained was to send off the paperwork to the social housing regulator at the Homes and Communities Agency. When she departed on holiday Ms Nanda was chief executive of Thames Valley, but she thought she would be working for the merged organisation on her return.

At what point, though, did Ms Nanda first get an inkling that there might be a problem?

“When I got a phone call from my chair,” she says. So it was a shock? “Yes. It was a complete surprise.”

The $64m question, of course, is what caused Genesis to pull out of a merger it had all but gone through with? Last week, Inside Housing revealed that Genesis had been keen to push forward swiftly with further mergers once the deal with TVH was finalised. TVH was unhappy with this as it wanted to concentrate in the short-term on integrating the new business. It appears this difference was key to the whole debacle. But the official reason given, according to Ms Nanda, is that Genesis was unhappy that Thames Valley would dominate the board of the new organisation (the board would have been made up of six members from Thames Valley and three from Genesis).

This seems strange, as the the board was agreed months beforehand – Mr Clayton-Smith was announced as the chair designate back in February. But its make-up may have grown in significance as Genesis began to vocalise its ambitions to quickly conduct further mergers.

“They were talking about one merger and another merger,” Ms Nanda states. “We were saying let’s do this one and get it right. They were clear that they wanted another one after this. We were clear that our strategy and agreement is that we were merging and we have to get the systems right, we have to integrate the organisations. There is a huge amount to do. You do that first. Then you review your strategy.”

Ms Nanda adds that Thames Valley wasn’t saying “no never”. “We were just saying ‘let’s focus on this’.”

Nonetheless, Ms Nanda says she struggles to understand why the decision to pull out was made so late in the day. She is full of smiles during the interview, projecting an image of the calm chief executive looking to the future, but it is clear how unhappy she is about how things played out.

“I do think that to do that at the last minute when you had all the information over that time around the make-up of the board and the executive is quite unbelievable,” she states. Pulling out “on the day you send the papers off, is for me a personal sadness really”, she adds. Clearly it maximises the cost too - which Ms Nanda says is being “collated”.

Ms Nanda still sounds slightly incredulous about the whole thing. “Maybe they felt there was too much of a strength of Thames Valley on that board and the things we wanted to prioritise,” she states. “Although we had the same business plan. We had an agreed plan.”

Knowing what she knows now, would Ms Nanda have done anything differently looking back?

“You do reflect on things,” she says. “But we had a very clear strategy. We worked through all the issues. We were completely open. Reflecting on what we could do differently, I don’t think there is anything.”

This leads to a slightly more tricky question. Given that Genesis has openly stated that it wants to pursue further mergers quickly, is there any advice she can give the organisation to help it meet with more success next time round?

“I think it is for Genesis to look at what they do differently,” she starts, before suggesting that if the make-up of the board was an issue they might concentrate on what their ambitions are and think about “what we need in order to achieve them”.

“They pulled out on the last day,” she continues. “Anyone they talk to I think they will have to make sure they are ready with all the commitments they are making as they go along.”

Future plans

Genesis is clearly eyeing up potential future mergers. Will Thames Valley be returning to the fray as well?

“As I said to the staff, ‘you don’t get married just after you got divorced’,” Ms Nanda states. “You need to take stock. You don’t get married the next week because you haven’t thought about it, have you?”

Did she have an inkling that Genesis may have started to eye up future partners before it jilted Thames Valley at the altar?

“Maybe they have been talking to others but I don’t have any knowledge of that,” Ms Nanda states. “We haven’t and we are quite clear we just need to take stock and think about what our strategy is going forward so we can achieve that overall vision.”

The Genesis Thames Valley collapse followed hot on the heels of failed mergers between Hyde and L&Q and East Thames, and Sanctuary and Housing & Care 21. Does Ms Nanda think these failures might prove politically costly for the sector at some point, given that most had promised to deliver new housing as a result?

Ms Nanda says she thinks Theresa May’s new government will “have lots of other things to think about” than housing association mergers. But she adds: “I think the issue is going to be whether associations are building [enough] homes.”

She admits that “ultimately there will be fewer homes built” because the merger collapsed but stresses that Thames Valley still plans to build 1,500 homes a year “more than other organisations of our size”. It has ambitions to up this by “looking at other partnerships” although this may or may not involve further mergers.

Ms Nanda is clear about the association’s future purpose too.

“My own values are very strong and I really, really believe in good services for residents, I believe in social housing and I believe that we are there to provide for the poorest as well as those on a middle income and more homes altogether.”

For now Ms Nanda is determinedly looking to the future and what comes next for Thames Valley (she praises her own staff - and, indeed, Genesis’ staff - numerous times throughout the interview). As for Genesis, does she think that ultimately they made the right decision?

“I think all our views are if they feel that strongly to call it off at the last minute, and that they weren’t going to achieve what they wanted to achieve because they didn’t have the right balance on the board, then it is right that they didn’t go through with it. What amazed us was that hadn’t been raised.”

Ms Nanda says she won’t be sore about the collapse of the merger going forward and if Genesis wants to merge with another organisation “good luck to them”. “If it produces better services, or more homes, which is what they say they want to do, then give it a go.”

And what is Ms Nanda’s relationship likely to be with Genesis going forward?

“After this interview?” Ms Nanda laughs. “Quite frankly I’m not going to give them a second thought.”