Well, now it seems that Sir John may have misjudged the company's value too. He's agreed 443p a share from Dubai Ports World, together with an expensive break deal if the deal doesn't go through, only to find that Temasek Holdings, the Singapore government investment agency, is prepared to pay even more. If no one else can recognise the value of ports, our friends from the east plainly can.
Even so, Temasek's action in attempting to buy 5 per cent of the company is a bit of a puzzle. Does Temasek eventually intend to bid, or is this just a blocking tactic? Five per cent is plainly not enough to block the bid outright, but if the effect is to anchor the P&O share price at above the value of the Dubai bid, then the agreed offer cannot succeed; it would be more advantageous to sell in the market than to accept Dubai's money.
The market bet is that either Temasek or someone else will eventually bid higher, but it is by no means a given, making for one of the most joyous arbitrage opportunities in ages. Meanwhile, the P&O board and its advisers are made to look a little naive in not holding out for more, though on this score I too must hold my hands up and admit that I thought the Dubai bid as full a valuation as we were ever likely to see. Instead, this one looks set to run and run.
Plenty left for Sir Terry to do at Tesco
Sir Terry Leahy to quit Tesco? This hardy perennial of a rumour was again seeking traction yesterday, but it scarcely seems more likely now than the last time it was doing the rounds and Sir Terry was swift to stamp on it. There's still plenty left to do as chief executive, Sir Terry said as he was named Management Today chief executive of the year.
There are two reasons for thinking Sir Terry, still only 49 but already with eight years under his belt as chief executive of one of Britain's most successful companies, might want to seek pastures new. One is that this is possibly already as good as it gets for Tesco. The low hanging fruit of British growth may already have been largely plucked. With Sainsbury, Asda, Morrison and even Marks & Spencer finally showing signs of getting their act together, it gets much tougher from here on in.
Sir Terry has successfully sought fresh sources of growth in non-foods, services and overseas expansion, but these are as yet small beer by comparison with his core, UK groceries business, and also much higher risk. As the empire expands, the lines of supply and communication grow ever more stretched and the scope for calamity gets that much higher. Getting out at the top, or knowing when to leave, is the reality behind many an outstanding business reputation.
The other reason for thinking Sir Terry might think the timing right to move over and let someone else have a go is that all chief executives, however brilliant, eventually become stale, tired and complacent. By outstaying their welcome they stifle younger talent, which progressively cannot see a way to the top job and leave.
Of the two reasons, Sir Terry would probably cite the latter as the more compelling, yet those who think he's about to leave it to someone else to oversee the next phase of the company's growth obviously don't know the nature of the man. Sir Terry has been born into an age of corporate globalisation. For retailing we are still only at the beginning of that process and there are as yet only five serious players in the game - WalMart, Carrefour, Ahold, Metro and Tesco.
Next stop for Sir Terry as he walks the tightrope of high-risk international growth is the United States, traditional graveyard of British retail ambition. Any serious global pretender has eventually to be in the world's largest retail market.
There's nowhere on earth so competitive or cut-throat, yet scale efficiencies and low property costs can mean spectacular returns for those that get it right. Tesco has recently stepped up its efforts to find an appropriate acquisition from which to expand into the world's greatest free market economy, but it's not going to be easy. Sir Terry's predecessor, Lord MacLaurin, tried and failed on several occasions. The most appropriate companies are either too expensive, or as with Meijer Stores, where there was a recent approach, not for sale.
But don't expect Sir Terry to hang up his boots until he has at least established and bedded down his base camp.
Ernie Harrison's creation reaches 20
It's hard to believe about such a huge company but Vodafone, which younger readers might think has been around for ever, was just 20 years old this week. A lot has changed in that time, as Nelson Mandela, former president of South Africa, reminded the great and the good of City and industry assembled for a celebratory party on Thursday night.
At the time Vodafone was born in the mid-1980s, Mr Mandela was still languishing in jail on Robben Island, Rupert Murdoch was battling the print unions outside Fortress Wapping, the Berlin Wall was still standing and Frankie Goes to Hollywood was top of the charts.
Yet perhaps the most striking thing about this birthday is not how things have changed, but how quickly mobile telephony has evolved from invention as an unwieldy brick, that required several stone of battery power to be lugged around on your shoulder to make it work, to mass market technology with European penetration rates of more than 100 per cent. Why, the company is barely out of adolescence, yet today mobile telephony is so all pervasive that it can be bought from street vending machines, rather in the nature of a disposable item, at £50 a pop.
This is very probably the fastest take-up of a new technology of all time, easily outstripping the motor car, traditional landline telephony, and even the TV. We won't count video, which is already yesterday's technology, while even the PC has yet to achieve such high penetration rates and in any case is today being fast absorbed into the mobile for many of its chief attributes. Few people remotely foresaw the phenomenon.
One who did was the redoubtable Sir Ernest Harrison, who back then was chairman of Racal, the electronics company which spawned Vodafone. Now 79, but still sharp as a knife, Sir Ernest told his audience that Vodafone was laughed out of court in the City when it predicated its business plan on an eventual subscriber base of 100,000. Hopelessly optimistic, everyone said. They'll be lucky to get half that. The idea that the mobile would ever be more than a businessman's toy was widely thought risible.
The rest, as they say, is history. Within a few years, Vodafone had sailed through 100,000. Today it stands at 171 million subscribers worldwide. The mobile has become as pervasive a form of communication as direct interaction itself. It's quick, it's easy, it is personalised and its costs are within the reach of all segments of the population.
How strange, then, that the debate around the future of Vodafone is already whether the mobile telephony goliath has gone ex-growth and should be paying out even more than the £9bn in dividends and share buy-backs planned for this year. Sell the Japanese business, sell the US interests, forget 3G and run Europe for cash, say the hedge funds. The corporate evolution from growth stock to perceived utility has been almost as rapid as the technology itself from unwieldy brick to the height of fashion accessory cool.
Twenty years. There's no company in Britain today that comes even remotely close in terms of entrepreneurial achievement, and, despite the boom and bust of the dot.com years, value creation. Now that really is something worth celebrating.Reuse content