No Pain No Gain: Portfolio in profit but loss of S&N to be mourned

The No Pain, No Gain portfolio has endured quite a battering in the past few months. So I should be enthusiastically toasting brewer Scottish & Newcastle's apparent surrender to the combined might of Continental predators, Carlsberg and Heineken, following a hostile three-month confrontation.

But I must confess that a touch of sadness tempers my cheer. It is always nice to score an investment hit. And the 800p cash bid means the portfolio has more than doubled its money. Yet the annihilation of another leading British company at the hands of overseas predators is difficult for an old timer to swallow.

Scottish is not a vital part of the nation's infrastructure. However, it is the last survivor of what was once a powerful force – the "big six" of British brewing. At one time, the likes of Allied Domecq and Bass could mix it with any overseas marauder. But persistent Government interference – and a lack of consistency – drew the strength from the beerage. In the past two decades our top brewers have fallen to overseas invaders.

Appeasement by many leading British companies when faced by foreign bidders is likely to damage the long-term financial health of the nation. From a variety of industries resistance has been minimal. Scottish, once the smallest of the brewing old guard, is to be carved up by Carlsberg and Heineken – already known as "the lager louts". The resulting devastation will lead to many jobs being lost and probably the sale of some operations.

Still I believe the fall of Scottish was inevitable once it failed to clinch a transformational deal. It was also weakened by its wide spread of shareholders. Both its conquerors can command the protection of powerful influences. There is still a chance Scottish will attract another bid. Anheuser-Busch and SABMiller could be interested. And the 800p a share offer, although probably adequate, is not top dollar.

My own guess is that Scottish should have commanded a figure nearer 850p. Its activities in the former Soviet Union and its Indian involvement, as well as its 25 per cent of the British beer market with leading brands like Fosters and John Smith's plus Bulmer's cider, suggest the world's seventh largest brewer is an exceedingly rich prize. Unlike many of our industry giants, it fought its corner but was probably caught on the hop by the stock market turmoil; no doubt thinking 800p was the best it could obtain. In the 1987 crash it had a similar experience but was then on the other side of the negotiating table.

Still, as a purely mercenary creation, the portfolio must count its blessings. After all, it has had to ditch, thankfully at a profit, three former high flyers and watch other constituents eroded in the stock market retreat.

When I descended on Scottish in 1999, the take-over influence loomed large in my thinking. The bid has been a long time coming. At one time, SABMiller got near to striking. But until the lager brewers emerged, action had been confined to Scottish deals that did not provide quite enough muscle to challenge the leaders of the brewing pack.

The Food & Drink Group, the Jamies and Henry J Bean bar chain, has made sure that any Scottish success does not go to my head. Its figures were bad enough to bring anyone down to earth with a resounding bang. FDG has, in effect, put itself up for sale. It says it is "sub scale" for the more demanding trading climate that is emerging and is "actively looking for a substantial corporate transaction". The pre-tax profit came out at £561,000 against £928,000.

It's all so different from last year when the group exuded confidence. With the shares bumping along at around 90p, after brushing 60p, the portfolio might as well hang on for the time being to see what sort of deal chairman Stephen Thomas can produce. After having paid 241.5 a share, most of its investment has already disappeared.

FDG may have been a little unlucky but it must take the blame for the current stock market disenchantment. The group has over the years cost lots of people lots of money. Don't forget, it started life as Hartford, featuring a host of celebrity names on its share register and running up-market restaurants, including the much-hyped Pharmacy in London's Notting Hill.

Independent Partners; Do you need financial advice on your investments, pension or insurance? Book a free consultation with an independent Financial Adviser at

Arts and Entertainment
tvPoldark, TV review
Arts and Entertainment
Cassetteboy's latest video is called Emperor's New Clothes rap
videoThe political parody genius duo strike again with new video
Arts and Entertainment
Louis Theroux: By Reason of Insanity takes him behind the bars again
tvBy Reason of Insanity, TV review
Lois Pryce... Life Without a Postcode. Lois lives on a boat with her husband.. Registering to vote in the election has prooved to be very difficult without a fixed residential post code. (David Sandison)
newsHow living on a houseboat meant I didn't officially 'exist'
Finacial products from our partners
Property search
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Recruitment Genius: Retirement Coordinator - Financial Services

    Negotiable: Recruitment Genius: To provide a prompt, friendly and efficient se...

    Recruitment Genius: Annuities / Pensions Administrator

    Negotiable: Recruitment Genius: You will be the first point of contact for all...

    Ashdown Group: HR, Payroll & Benefits Officer - Altrincham - up to £24,000.

    £18000 - £24000 per annum + benefits: Ashdown Group: HR, Payroll & Benefits Of...

    Ashdown Group: Learning and Development Programme Manager

    £35000 - £38000 per annum + benefits : Ashdown Group: A highly successful, int...

    Day In a Page

    Election 2015: How many of the Government's coalition agreement promises have been kept?

    Promises, promises

    But how many coalition agreement pledges have been kept?
    The Gaza fisherman who built his own reef - and was shot dead there by an Israeli gunboat

    The death of a Gaza fisherman

    He built his own reef, and was fatally shot there by an Israeli gunboat
    Saudi Arabia's airstrikes in Yemen are fuelling the Gulf's fire

    Saudi airstrikes are fuelling the Gulf's fire

    Arab intervention in Yemen risks entrenching Sunni-Shia divide and handing a victory to Isis, says Patrick Cockburn
    Zayn Malik's departure from One Direction shows the perils of fame in the age of social media

    The only direction Zayn could go

    We wince at the anguish of One Direction's fans, but Malik's departure shows the perils of fame in the age of social media
    Young Magician of the Year 2015: Meet the schoolgirl from Newcastle who has her heart set on being the competition's first female winner

    Spells like teen spirit

    A 16-year-old from Newcastle has set her heart on being the first female to win Young Magician of the Year. Jonathan Owen meets her
    Jonathan Anderson: If fashion is a cycle, this young man knows just how to ride it

    If fashion is a cycle, this young man knows just how to ride it

    British designer Jonathan Anderson is putting his stamp on venerable house Loewe
    Number plates scheme could provide a licence to offend in the land of the free

    Licence to offend in the land of the free

    Cash-strapped states have hit on a way of making money out of drivers that may be in collision with the First Amendment, says Rupert Cornwell
    From farm to fork: Meet the Cornish fishermen, vegetable-growers and butchers causing a stir in London's top restaurants

    From farm to fork in Cornwall

    One man is bringing together Cornwall's most accomplished growers, fishermen and butchers with London's best chefs to put the finest, freshest produce on the plates of some of the country’s best restaurants
    Robert Parker interview: The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes

    Robert Parker interview

    The world's top wine critic on tasting 10,000 bottles a year, absurd drinking notes and New World wannabes
    Don't believe the stereotype - or should you?

    Don't believe the stereotype - or should you?

    We exaggerate regional traits and turn them into jokes - and those on the receiving end are in on it too, says DJ Taylor
    How to make your own Easter egg: Willie Harcourt-Cooze shares his chocolate recipes

    How to make your own Easter egg

    Willie Harcourt-Cooze talks about his love affair with 'cacao' - and creates an Easter egg especially for The Independent on Sunday
    Bill Granger recipes: Our chef declares barbecue season open with his twist on a tradtional Easter Sunday lamb lunch

    Bill Granger's twist on Easter Sunday lunch

    Next weekend, our chef plans to return to his Aussie roots by firing up the barbecue
    Joe Marler: 'It's the way I think the game should be played'

    Joe Marler: 'It's the way I think the game should be played'

    The England prop relives the highs and lows of last Saturday's remarkable afternoon of Six Nations rugby
    Cricket World Cup 2015: Has the success of the tournament spelt the end for Test matches?

    Cricket World Cup 2015

    Has the success of the tournament spelt the end for Test matches?
    The Last Word: Justin Gatlin knows the price of everything, the value of nothing

    Michael Calvin's Last Word

    Justin Gatlin knows the price of everything, the value of nothing