Private Investor: At least Mr Green won't be getting his hands on Tesco

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The Independent Online

So The Bid has landed. Difficult for most of us to judge its true value, given the level of uncertainty about the long-term intentions of Philip Green for Marks & Spencer, but even if the more pessimistic estimates of the bid are accepted then it looks a reasonable if slightly stingy offer.

So The Bid has landed. Difficult for most of us to judge its true value, given the level of uncertainty about the long-term intentions of Philip Green for Marks & Spencer, but even if the more pessimistic estimates of the bid are accepted then it looks a reasonable if slightly stingy offer. At 290p to 310p in cash per share plus a holding in Mr Green's new company, the City analysts reckon it is worth 340p to 400p per M&S share. That's quite a premium, in fact to the sub-300p levels the shares stood at before Mr Green's latest initiative, but I would say it is about 10 per cent off what he needs to do to gain the thanks and unqualified support of M&S shareholders, or at least this one.

I bought at 333p 10 years ago, at just under 400p in 2002 and at 317p last year. Plus a few sundry scrip dividends in the good old days at well over those levels. So Mr Green means that I may be in the money, just, and my message to him is: yes, you can probably have my M&S shares, just make your offer a little bit more generous to compensate for the fact that we Marks shareholders will be shortly become minority shareholders, ie helpless passengers, in your new and to us slightly risky venture.

It's all a great pity, because the M&S brand should never have stumbled in the first place. I hope, as a regular Marks shopper, that they'll continue to make hard-wearing clothes that fit strange body shapes such as mine, because if they don't I will find myself not only an ex-shareholder but an ex-customer as well.Strange indeed.

Otherwise I'm still out there looking for value. I note with some satisfaction that Tesco has already ticked up about 5p on the 251p I bought at last week (no fear of Mr Green getting his hands on them I think) so that holding is looking good.

I would have thought that at over $40 a barrel even those clowns at Shell should to be able to make some money. Indeed the increase in the price of the black stuff must far exceed the overstatement of reserves that Shell famously and disgracefully indulged in recently.

I see Shell is back around 400p or so, bouncing back from the 350p or so they bottomed out at in the immediate wake of the reserves scandal. Perhaps they have further to go. I won't be adding to my holding just yet however, because I feel I need some time to have a bit more of a ponder about where the markets might go next in the current turmoil. Indeed as I write the price of crude is declining. All very well, of course, but what happens if the House of Saud finally loses its grip on its Kingdom? Then the fuel protesters would have something to cry about. I cannot help wondering how a war that was, in reality, fought for oil and to make capitalism safe from terrorism has brought us to such a pass.

I suppose I ought to glance at what National Savings is offering in the way of index-linked returns or, if I were a little more adventurous, the prospects for index-linked gilts. The return of inflation may still seem a little far-fetched even now but it is a more realistic scenario than it has been for some years. Indeed for a time I was worried about what would happen to the few index-linked certificates I still hold if we actually had an official declaration of UK price deflation in the relevant period: would National Savings return less than I put in?

Now it would seem higher inflation is about to descend on us, just when the pundits were exploring the consequences of global deflation. Well, inflation, as any schoolboy knows, produces winners and losers capriciously, and in the next round, if that is indeed what we are in for, much depends on the housing market.

I suspect that inflation won't get so bad that it wipes out the value of mortgage debts in the way it did years ago, and I guess that interest rates will have to rise rather more than some first-time borrowers may have thought was at all likely. A crunch, in other words, with a redistribution of wealth. Maybe there'll be protests about that. Hold on tight, folks.

s.o'grady@independent.co.uk

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