Bid watchdog under fire

Investors furious with Takeover Panel after Northern Electric fiasco

Top investment institutions this weekend slammed the Takeover Panel, the City's bid watchdog, for effectively robbing them of a better price in CalEnergy's pounds 780m hostile bid for Northern Electric.

Investors, understood to include the Prudential, are critical of the full Panel's inconsistency in overruling its executive and extending the bid's closing datefor four days until Christmas Eve.

The extension cost Northern its independence. In the event, however, only just over 20 per cent of outside investors accepted the bid on top of the 30 per cent CalEnergy already owned.

"You should not change the rules of the game as it is being played, which the Panel did. There was a fair degree of muddle in all this, which stopped investors getting a fair price," one leading investment manager said.

Yesterday the Prudential, which intervened to support Northern, said it had yet to decide whether to accept the 650p bid.

M&G and Foreign & Colonial are among the institutions sore at the Panel's decisions. The Prudential will also make strong representations to the Panel's own inquest of events.

"We regret the fact that a management that did well by shareholders was not successful in these exceptional circumstances," a Prudential spokesman said.

The Panel is already considering a substantial alteration of its rulebook following the controversy which centres on its broker BZW's role in the defence. BZW and Schroders, Northern's merchant bank, bought a 2.4 per cent stake in their client to stop CalEnergy getting over 50 per cent acceptances before the bid expired on Friday 20 December.

The full Panel subsequently extended the bid after BZW's late disclosure of a pounds 250,000 performance-based fee for its work. That raised suspicions, denied by all parties, that BZW was being improperly remunerated by Northern to buy its own shares.

The Panel will now review whether advisers will be allowed to buy shares in future at all in a decision due by mid-January. Some members of the panel are in favour of a total ban to bring the UK in line with US practice. Institutions including the Prudential are also pressing for full disclosure of advisers' fees.

"Our aim has always been to have an open and liberal policy, and not to seek to fetter markets unduly," said Alistair Defriez, the Panel's director general. "In the past we have allowed purchases of shares by advisers as long as they were on an arms-length basis and with no financial inducements. The situation with Northern has raised questions over whether we should prohibit these purchases,"

Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
Sport
Louis van Gaal
football
Voices
An easy-peel potato; Dave Hax has come up with an ingenious method in food preparation
voicesDave Hax's domestic tips are reminiscent of George Orwell's tea routine. The world might need revolution, but we like to sweat the small stuff, says DJ Taylor
News
i100
Arts and Entertainment
Jay Z has placed a bet on streaming being the future for music and videos
music
Arts and Entertainment
Festival-goers soak up the atmosphere at Glastonbury
music
  • Get to the point
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45,000: SThree: SThree Group have been well e...

Ashdown Group: IT Manager / Development Manager - NW London - £58k + 15% bonus

£50000 - £667000 per annum + excellent benefits : Ashdown Group: IT Manager / ...

Recruitment Genius: Sales Consultant / Telemarketer - OTE £20,000

£13000 - £20000 per annum: Recruitment Genius: Scotland's leading life insuran...

Ashdown Group: Training Programme Manager - City, London

£40000 - £45000 per annum + benefits : Ashdown Group: Training Programme Manag...

Day In a Page

NHS struggling to monitor the safety and efficacy of its services outsourced to private providers

Who's monitoring the outsourced NHS services?

A report finds that private firms are not being properly assessed for their quality of care
Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

Zac Goldsmith: 'I'll trigger a by-election over Heathrow'

The Tory MP said he did not want to stand again unless his party's manifesto ruled out a third runway. But he's doing so. Watch this space
How do Greek voters feel about Syriza's backtracking on its anti-austerity pledge?

How do Greeks feel about Syriza?

Five voters from different backgrounds tell us what they expect from Syriza's charismatic leader Alexis Tsipras
From Iraq to Libya and Syria: The wars that come back to haunt us

The wars that come back to haunt us

David Cameron should not escape blame for his role in conflicts that are still raging, argues Patrick Cockburn
Sam Baker and Lauren Laverne: Too busy to surf? Head to The Pool

Too busy to surf? Head to The Pool

A new website is trying to declutter the internet to help busy women. Holly Williams meets the founders
Heston Blumenthal to cook up a spice odyssey for British astronaut manning the International Space Station

UK's Major Tum to blast off on a spice odyssey

Nothing but the best for British astronaut as chef Heston Blumenthal cooks up his rations
John Harrison's 'longitude' clock sets new record - 300 years on

‘Longitude’ clock sets new record - 300 years on

Greenwich horologists celebrate as it keeps to within a second of real time over a 100-day test
Fears in the US of being outgunned in the vital propaganda wars by Russia, China - and even Isis - have prompted a rethink on overseas broadcasters

Let the propaganda wars begin - again

'Accurate, objective, comprehensive': that was Voice of America's creed, but now its masters want it to promote US policy, reports Rupert Cornwell
Why Japan's incredible long-distance runners will never win the London Marathon

Japan's incredible long-distance runners

Every year, Japanese long-distance runners post some of the world's fastest times – yet, come next weekend, not a single elite competitor from the country will be at the London Marathon
Why does Tom Drury remain the greatest writer you've never heard of?

Tom Drury: The quiet American

His debut was considered one of the finest novels of the past 50 years, and he is every bit the equal of his contemporaries, Jonathan Franzen, Dave Eggers and David Foster Wallace
You should judge a person by how they peel a potato

You should judge a person by how they peel a potato

Dave Hax's domestic tips are reminiscent of George Orwell's tea routine. The world might need revolution, but we like to sweat the small stuff, says DJ Taylor
Beige is back: The drab car colours of the 1970s are proving popular again

Beige to the future

Flares and flounce are back on catwalks but a revival in ’70s car paintjobs was a stack-heeled step too far – until now
Bill Granger recipes: Our chef's dishes highlight the delicate essence of fresh cheeses

Bill Granger cooks with fresh cheeses

More delicate on the palate, milder, fresh cheeses can also be kinder to the waistline
Aston Villa vs Liverpool: 'This FA Cup run has been wonderful,' says veteran Shay Given

Shay Given: 'This FA Cup run has been wonderful'

The Villa keeper has been overlooked for a long time and has unhappy memories of the national stadium – but he is savouring his chance to play at Wembley
Timeless drama of Championship race in league of its own - Michael Calvin

Michael Calvin's Last Word

Timeless drama of Championship race in league of its own