No Pain No Gain: Portfolio in profit but loss of S&N to be mourned
Saturday 02 February 2008
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; request a free guide on NISAs from Hargreaves Lansdown
Five Questions: Changes to car tax discs
10 tips for taking out a personal loan
Ticking time bomb: Interest rate rises are coming, so start preparing now
Peer to Peer lending: This alternative market is offering firms a lifeline
Debt problems: How you can nip your money problems in the bud and sleep easy at night
- 1 Five-year-old Iris Grace is raising awareness of autism through her extraordinary paintings
- 2 Car tax disc changes: Two days to go - and they affect you much more than just not displaying a piece of paper
- 3 The Simpsons death: Creator Al Jean would 'kill himself' before character like Homer or Lisa
- 4 British man raped while urinating in bushes at Oktoberfest beer festival in Germany
- 5 A teacher speaks out: 'I'm effectively being forced out of a career that I wanted to love'
Isis, we are told, is a 'clear and dangerous threat to our way of life'. I’m sorry, but I just don’t buy it
Exclusive: 'Putin's Russia has been my biggest regret,' says Nato's outgoing Secretary General
'Women, walk wherever you want' posters taken down in Stamford Hill following 'unacceptable' signs separating men and women
There’s no excuse for Dave Lee Travis’s behaviour, but we need to keep a sense of proportion
Mark Reckless becomes second Tory MP to defect to Ukip in a month
Should gay sex be illegal? 16% of Britons think so
- < Previous
- Next >
iJobs Money & Business
NEGOTIABLE: Austen Lloyd: TRUST ACCOUNTANT - KENTIf you are a Chartered Accou...
£18000 - £20000 per annum + OTE £30000: SThree: SThree are a global FTSE 250 b...
Highly Competitive Salary: Austen Lloyd: CITY - Law Costs Draftsperson - NICHE...
£300 - £330 per day: Ashdown Group: SQL Developer (Stored Procedures) Watford...
Day In a Page
A five-bedroom terraced house on the popular Peterborough Estate, ideally located for both Eel Brook Common and South Park
A state-of-the-art farm-building conversion on the former Cliveden Estate, with 11,420sq ft of internal space, cinema and wine cellar
A three-bedroom, 15th-century cottage with original features in the picturesque village of Sissinghurst
A six-bedroom terraced house with large south-facing roof terrace, cinema room and wine cellar
A new seven-bedroom home built in Queen Anne-style with swimming pool and parkland views in Mortimer
A listed, four-bedroom farmhouse in the rural hamlet of Rushall with detached barn, four acres of gardens and paddocks
A first-floor flat with two bedrooms, a spacious reception room and communal grounds in a leafy part of London
A three-bedroom flat with a spacious rootop terrace and balcony, accessed from a private gated courtyard
A Grade II-listed pile with six bedrooms, stables and 39 acres of grounds in Standlake
A two-bedroom flat with boutique hotel-style interiors, close to the foodie haunt of West End Lane
A two-bedroom flat in a beautiful old vicarage, with many original features, close to the city centre
A three-bedroom 16th-century home with an aga kitchen, private gardens and heated outdoor pool, in Hadleigh
A three-bedrom home in sought-after Queen's Gate Mews, with Italian marble-finished bathrooms
Surrounded by glorious countryside in the village of Udimore, sits this impressive four-kiln oast and barn conversion
A five-bedroom house in the picturesque village of Kettlewell, north Yorkshire
An 18th-century former coaching inn with original staircase, open fireplaces and beams throughout
A Grade II-listed Georgian town house with three bedrooms and a south-facing courtyard, near Arundel Castle
Feel on top of the world at this über chic penthouse on the 37th floor of one of Europe’s tallest blocks.
A Grade II-listed Victorian villa with six bedrooms and two further cottages, all with spectacular sea views
A grade II-listed, Georgian cottage with mature 50ft garden, perfect for summer entertaining
A magnificent Georgian pile with turrets, seven bedrooms, a heated pool and four acres of gardens
Fairoak Farm has five bedroom suites, gym, outdoor swimming pool and golf course
Chic two-bedroom river-fronted flat with a private lift that delivers you directly to your home
A spectacular seven-bedroom Tudor pile, once owned by Henry VIII, with 18 acres of land
A seven-bedroom Georgian property previously used as a picturesque wedding venue
A split-level flat in a church conversion with two en suite bedrooms and 1,200sq ft of living space
A three-bedroom bungalow situated behind an impressive stone wall, £645,000
Windsor Castle overlooks this three-bedroom Victorian cottage located on one of Windsor's smartest roads
Chapel House is a former vicarage with nine bedrooms in the beautiful Upper Wye Valley
A five-bedroom B&B and separate owner's accomodation with potential for conversion
Enjoy summer by the Thames in this two double-bedroom converted warehouse in Rotherhithe village
A one-bedroom, luxury apartment with private gym and concierge service in Moorgate
A four-bedroom house in Hermitage Gardens with three reception rooms and landscaped gardens
A seven-bedroom Grade II-listed property with a separate self-contained apartment
A five-bedroom Victorian house with three reception rooms and galleried landing, £695,000
A six-bedroom farmhouse with five acres of land in a former cloth-making village
A secluded seven-bedroom detached house with large private garden, £490,000
A three-bedroom cottage overlooking Sarratt village green with open fires and solid oak floors
A three-bedroom maisonette flat in a Grade I-listed, Georgian townhouse in a sought-after location