Friday May 9, 07:45 PM
Office politics sees Stelios lock horns
Sir Stelios Haji-Ioannou, the ebullient founder of EasyJet (LSE: EZJ.L - news) , used to be on such good terms with Mark Dixon, the man behind
the rise and fall and rise again of office group Regus (LSE: RGU.L - news) , that he recommended him for membership of the Monaco Yacht Club.How the winds have changed. The pair, both residents of the exclusive principality, have locked horns over what Sir Stelios claims are "dirty tricks" designed to stymie his entry to the serviced office industry, the latest market the serial entrepreneur is trying to crack. Regus, the world's biggest serviced offices group, contends that Sir Stelios "picked its brains" and that he is now levelling "completely unfounded" allegations. The contretemps - over which Sir Stelios is threatening to sue Regus - has its origins in the plush surrounds of London's Savoy Hotel, where Sir Stelios and Mr Dixon met on March 20 last year. Almost every detail of what followed is disputed by the two sides. Over breakfast, Sir Stelios says he sketched his idea for a joint venture with Regus, a business aimed at the lower end of the market for temporary office space with no-frills facilities booked online by the week and paid for in advance. An e-mail he sent to Mr Dixon setting up the meeting details some of the business model. The tabular content relating to this article is not available to view. Apologies in advance for the inconvenience caused. Regus's account is very different. "The meeting was with a number of people and held in a public place," the company says. "There was no detailed business plan presented, just a high-level discussion where Regus, with its 20 years' experience in the sector, shared its insight and gave advice. There was no confidential information given to or used by Regus to its commercial advantage." Communications between the companies' executives on a possible joint venture followed and continued until recently. In the meantime, Sir Stelios went public with his plan for Easyoffice in April last year. The Greek-Cypriot entrepreneur's 17th "easy" venture was launched in November (Frankfurt: A0S9N7 - news) . Its 35 basic offices on High Street Kensington are all now occupied and Sir Stelios says he is considering international expansion. It also acts as a broker for other serviced offices through its website. Sir Stelios claims, however, that his plans are being hampered by an online office space broker called Nuclei, which now has 17 staff based in Surrey. Since 2000, it has traded as Easy Offices. Easygroup had clashed with Nuclei before. In 2001, the company agreed to withdraw the orange and white colouring on its website, the same colours Easygroup uses. The following year, Jon Abrahams, Nuclei's founder and managing director, rebutted demands that it change its name. The company fell from his radar, Sir Stelios says, until last August, four months after the contentious Savoy conversation, when Regus acquired a 49 per cent stake in Nuclei, leaving Mr Abrahams with the remaining 51 per cent. Mr Abrahams did not respond to requests for comment. A FTSE 250 (news) company with a market capitalisation of £880m, Regus says it took a stake in Nuclei, which is now expanding overseas, to allow Regus to grow internationally and not because of its trading name. The investment, however, raised hackles at Easygroup's west London headquarters. Laywers for Easygroup's intellectual property arm wrote to Regus's Mr Dixon on May 2. The letter, passed to the Financial Times by Sir Stelios, accuses Regus of breach of confidence, breach of fiduciary duty and conspiracy, and says it has attempted to foreclose Easyoffice's entry to the market. The letter also accuses Regus of "passing off", by using the Easy Offices name to seek "unfair advantage by piggy-backing off the enormous goodwill that [Easygroup] have built up in their 'easy' brands". Regus responded: "Stelios does not own the word 'easy'." Nuclei is challenging Easygroup's Easyoffice trademarks; its own application to trademark Easy Offices is pending. Regus's lawyers wrote back on Thursday rejecting all the allegations. Regus said: "These allegations are completely unfounded and we have absolutely no case to answer. Regus pioneered serviced offices almost 20 years ago and was the original low-cost champion." The company added: "Since 2001 there have been a number of meetings when [Sir] Stelios has picked our brains on this sector. We were in the midst of discussions with him and have acted in a perfectly legal and businesslike manner so were taken aback when these accusations appeared out of the blue. Many players in this industry also have interests in online office space brokers." The serviced offices market stands to become increasingly lucrative if an economic downturn deters businesses from buying their own property. With neither Mr Dixon nor Sir Stelios known for backing down, it seems unlikely they will be sharing the helm in the Mediterranean any time soon.
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