As a wall of private equity money crashes over the UK market, now would be an opportune time to discuss what’s really in the national interest
は 英国 too much of a soft touch when it comes to the ease with which quality companies here are allowed to fall prey to dubious looking takeover bids?
It’s a question that’s come around again thanks to the cynical and opportunistic bid for Morrisons by private equity firm Clayton, デュビリエ & ご飯, which has rapidly moved from the business pages to the front pages and from the City of London to the City of Westminster.
すでに, there’s talk of MPs intervening. The Business Energy & Industrial Strategy Committee is reportedly seeking vague “assurances” over jobs, which history suggests will do about as much good as asking Twitter to be gentle to the England football team if the players tamely surrender in the second round of the Euros.
A letter to the Competition & Markets Authority has been mentioned, and while that might look a little more promising, it really isn’t.
The problem with this dismal private equity proposal is that, short of the Morrisons board and Morrisons shareholders, showing a little steel, there is little that can realistically be done to stop it if the vultures are determined enough to play for keeps and move in for the kill. The CMA’s powers are strictly limited and there are no obvious competition grounds at play here.
It’s true that Morrisons plays an important role in the UK’s food production – it owns farms and produces a lot of its own product – but it would be quite a stretch to call that a “national security” issue. When it comes to creative interpretation of the rules you’d almost be in the territory of the French describing the production of yoghurt as a strategic national industry, as they once did to frustrate the designs Pepsi had on Danone.
The British have never really gone in for that sort of thing when it comes to mergers and acquisitions. Hands off has been the rule, with the ultra liberal takeover regime it operates usually held up as a strength; an example of Britain charting a radically different course to most of the rest of the world to the benefit of us all.
In the case of successive governments this has largely been an article of faith, with ministers’ religion largely informed by the preferences of the high priests of finance in the City of London. Rarely has it been the subject of serious debate, despite a long and sorry list of bad deals that have caused public concern.
But perhaps times are changing, with scepticism starting to be expressed among elements of the right as well as the left. Imagine how the standard ministerial script about the virtues of the untrammelled free market and the benefits to the UK of a laissez faire takeover regime might sound to a supermarket worker in, I don’t know… Batley & Spen? Or Hartlepool?
The last mass raid on UK companies by private equity coughed up plenty of fuel for the sceptics’ fire, notably Debenhams, which laid an egg when it was sold back to the public markets, but there were others.
The gobbling up of water companies by overseas hedge funds, その間, created all sorts of problems. Kraft Foods made promises when it took over Cadbury, only to break them within weeks. The feasting on young, innovative companies by America’s tech giants stifles innovation and the emergence of vibrant new businesses. And we all remember what happened when the world’s giant, over-stuffed banks went bad.
Then there are the lucky escapes. The aforementioned Kraft’s attempt to chow down on Unilever. Prizer’s tilt at AstraZeneca – just think about that for a moment and the implications it might have had. Would another pharma giant have agreed to deliver the vaccine developed by Oxford scientists at cost to poor and middle income countries had Astra not been around? Had CEO Pascal Soirot not said “non” to his suitor? And even he admitted there was a point at which he might have caved.
Not all deals are bad. If America’s Allied Universal runs G4S, the subject of repeated scandals, with a degree of competence, its takeover of the latter could be seen as saving the company from itself. I’m not sure Virgin Money is going to frighten the big four British banking groups any time soon, but scaling the business up through its merger with CYBG – which owns the Clydesdale and Yorkshire banks – gives it a lot more clout.
Nor am I really suggesting that the UK 政府 should put yoghurt makers on a par with defence contractors. しかしながら, as a wall of private equity money crashes over the UK market, assisted by some frankly invidious tax breaks in addition to the lighter than air touch of this country’s regulatory regime, now would be an opportune time to discuss what’s really in the national interest.