This is the first week of Advent, which traditionally was a time of fasting and self-denial in the Church ahead of Christmas, not unlike Lent’s preparations for Easter. In more austere times, when these seasons were strictly observed, marriages were not conducted in church during Advent.
The secular world of business, of course, pays even less attention to these matters than a Church that has abandoned its authoritarianism in favour of liberalism. The corporate marriages that are being lined up as Christmas approaches include last Friday’s raised offer by Bank of Scotland for NatWest and now the proposed merger between Carlton Communications and United News & Media. The latter is the sort of arranged marriage of empire that used to threaten peace between nations, but now just threatens peace between Rupert Murdoch and the Government.
Which brings me to another way in which corporate behaviour is unlikely to be seasonal over the coming month. There will be precious little goodwill among these corporates as they enter these marriages. In some instances, these are weddings that just won’t work – in others, marriage will be forced on unwilling partners whose hearts belong elsewhere.
In the case of the unions that won’t work, we can cite the Carlton/United match, for which the banns have been read for the first time. This really is something out of Trollope or Austen.
The wedding of the two well-to-do media families, to form one harmonious union, has enraged elderly business rival Rupert. His love affair with Laboura has already been poisoned by her guardian, Anthony Blair, who has frustrated the marriage of Rupert’s daughter to a handsome football club in Manchester.
But at the core of the narrative must be the impossibly ill-suited union between Carlton’s Michael Green and United’s Lord Hollick (friend of Anthony). This really is miserable, Victorian, drawing-room stuff, with the key difference that annulment will be allowed almost immediately it becomes apparent that the marriage cannot be consummated. No boardroom is big enough to accommodate the autocratic egos of Green and Hollick.
More interesting to my mind is the aggression that will develop outside the boardroom than within it. I’m not alone in thinking that the proposed merger of Carlton and United will not go uncontested.
Granada, the leisure combine chaired by the affable Gerry Robinson, is said to be poised to launch a hostile bid for United if the competition authorities wave through the proposed merger with Carlton. Granada’s opening shot could be expected to approach the &£5bn mark and the battle would be a bloody one, as Hollick and Green are forced to justify their value to shareholders, in the light of Robinson’s offer.
In this atmosphere of animosity, we will also have to take account of BSkyB seeking to protect its competitive position. Hell will have no fury like Murdoch spurned. The suspicion that Hollick has struck a deal with his New Labour mates, while Murdoch’s plans for Manchester United and BSkyB have been left to fry with regulators, will be more than enough for Murdoch’s media to decide that their flirtation with the Blairite Third Way was as misguided as the Tories’ faith in Lord Archer.
Again, we are not talking tidings of comfort and joy here for any of the participants. As things turn ugly, probably the leading beneficiary will be Robinson’s Granada, which can sneak in with a politically uncontaminated bid for United. What’s amazing here is that Granada, after all the challenges to the digestion after absorbing THF, should find itself in the position of being a leading UK predator. It’s said that even British Airways is in Robinson’s sights. As things stand, BA is a lowly-rated stock. The contest for BA would be another fiercely contested battle.
Meanwhile, Royal Bank of Scotland has launched a &£26.4bn hostile counter-bid for NatWest, as an alternative to the already very hostile offer on the table from the commoners over at plain old Bank of Scotland. BoS has been very canny with its raised offer last Friday – at a shade under &£25bn, it has added the prospect of a further &£1.20 special dividend contingent on subsequent disposals of non-core assets.
RBS, for its part, will fight as hard as it can this side of dirty. After “friendly” talks about an agreed bid last weekend, NatWest must have concluded that it was in the best interests of its shareholders for BoS and RBS to fight it out. The NatWest board must know that it won’t be able to secure any jobs in a new regime – RBS’s own top-level board restructuring of late last week would seem to be a signal to that effect. So NatWest may as well fight it out. More blood on the carpet.
So why all this hostility all of a sudden in British corporate relations? Part of the reason must be the seemingly unpuncturable buoyancy of equity markets. US Federal Reserve chairman Alan Greenspan occasionally makes one of his “irrational exuberance” remarks and the share markets wobble. But the FTSE index in the UK is testing record highs again. And, as a result, there is too much highly-rated paper chasing too few assets.
And that’s a recipe for hostile and contested bids, which further inflate those already over-rated markets. So, in the last month of the millennium, we can expect precious little peace and goodwill in corporate Britain – the gutters will run red into 2000.