Ernie, Vodafone's forgotten hero

IN the City, they called him The Silver Fox for his fabled negotiating skills. And his loyal army of fans called him the high priest of shareholder value.

But Sir Ernie Harrison, creator of Vodafone, never became super-rich himself. He retired four years ago, and this weekend must watch from the sidelines as Vodafone plays a dramatic high-stakes game he would surely relish.

Only American phone group AT&T knows if Vodafone has put in a bid of £19 billion for its mobile phones business, trumping rival Cingular.

And some of those close to the deal say Vodafone really plans to pounce on its current US partner Verizon in a £53 billion deal.

When Harrison retired after selling Racal Electronics, the company he had worked for since 1960, his shares were worth £24 million.

Not bad going, but Sir Christopher Gent - his young protege at Vodafone, which had been spun out of Racal - picked up £10 million in bonuses in the same year.

Along the way, Harrison helped ensure that just a pound invested in Racal Electronics would have been worth £14,000 by the time he sold off the rump of the company to Thales of France.

He became a legend, not least for creating Vodafone, which was floated in 1988 worth £1.8 billion. Today, the mobile phones giant is worth £93 billion and at the height of the dotcom boom it hit £270 billion.

Apart from Vodafone, other household names owned or started by Racal include security group Chubb and Camelot, the National Lottery operator.

Many of Harrison's entrepreneurial schemes were cooked up in late-night poker dice sessions with his executives. Harrison always claimed the stakes were small, but a former staffer says: 'You didn't play unless Ernie knew you could pay.'

While Harrison's great rival, GEC boss Arnold Weinstock, dismissed mobile phones as a gimmick, Harrison realised that the experience of Racal Electronics in military radio sets gave it a technological edge.

Racal executives Gerry Whent and Chris Gent were put in charge of the project. For four years after flotation, Racal kept 80% of Vodafone. Then, in a bold move, Harrison oversaw a huge demerger, handing out Vodafone shares to all Racal investors. He sold his entitlement to pay for his Racal share options.

In retirement, Harrison, the son of an East End docker, has taken on no business roles. He has a large house in Surrey and a second home in Majorca. He maintains an interest in horse racing, having once owned a winner of the King George VI stakes at Ascot.

He has refused numerous interview requests since quitting the City. A friend told Financial Mail: 'Sir Ernie has made it clear that retirement to him means just that. No jobs, no interviews.'