Bottom Line: Strange moves from Guinness Mahon
Tuesday 18 May 1993
GM advised Aberdeen first to reject, then to accept a 17p-a-share bid from the rival oil production company, Pittencrieff. Initially Pittencrieff offered only shares. The volte face came when it added a cash alternative.
The merchant bank's fee is in the region of pounds 120,000. It will receive perhaps only half that if Aberdeen retains its independence.
In fact the bid is all over bar the shouting. Pittencrieff owns 40 per cent of Aberdeen and one large institutional investor - believed to be Kleinwort Benson - promised its 9 per cent, taking Pittencrieff to within a whisker of victory.
GM's explanation for its higher fee is that the higher one-off payment today should be seen partly as compensation for the loss of Aberdeen's continuing corporate business. In other words, if Aberdeen were to hold on to its independence GM would continue to receive retainer payments. The single payment now may be higher but the long-term fee stream would be lost.
So financial advisers nowadays have service contracts, do they? No doubt GM is convinced that the Pittencrieff deal is in the best interests of shareholders.
But the GM fee arrangement, worked out amicably in the course of agreeing the Pittencrief terms, is all the more notable because a possibly better offer was in the air.
Before capitulating to Pittencrieff Aberdeen itself said it could raise 18p for shareholders by liquidating assets. Another party - also considering an asset sale - was also in the wings, said to be looking at an offer of 20p a share.
Aberdeen and its advisers may rightly prefer a bird firmly in the hand. But to choke off an alternative with two weeks of the bid still to run seems rather peremptory.
- 1 Nokia no more: Microsoft drops once-ubiquitous mobile name in favour of its Lumia brand
- 2 Renee Zellweger on plastic surgery reports: 'I'm living a fulfilling life and I'm thrilled that perhaps it shows'
- 3 Banksy not arrested: Internet duped by fake report claiming artist's identity revealed
- 4 Australian café owner sparks debate after saying 'No' to having unruly children on premises
- 5 Couple die within 28 hours of each other after being married for 73 years
Ottawa shooting: Canadian soldier dies after being shot at National War Memorial with one gunman killed inside parliament
Renee Zellweger on plastic surgery reports: 'I'm living a fulfilling life and I'm thrilled that perhaps it shows'
Isis releases first video showing stoning of woman accused of committing adultery as her father shouts 'don't call me Dad'
Banksy not arrested: Internet duped by fake report claiming artist's identity revealed
Diwali 2014: What is the festival of lights and how is it celebrated?
Cameron is warned 'no possibility' of UK reducing immigration and that bid to bring in quota on migrant workers would be illegal
Of course, teenage girls need role models – but not like beauty vlogger Zoella
Residents should throw a street party and mix with immigrant neighbours, councils told
Russell Brand threatened with arrest after filming outside Fox News headquarters
London bus driver 'kicks gay couple off for kissing'
Support for EU membership 'at highest level since 1991 with most Brits wanting to stay in'
iJobs Money & Business
£24000 - £28000 per annum + bonus & benefits: Ashdown Group: IT Business Syste...
£18000 - £23000 per annum + Commission: SThree: The SThree group is a world le...
£18000 - £23000 per annum + Comission: SThree: The SThree group is a world lea...
£20000 - £25000 per annum + OTE £Competitive: SThree: SThree Group and have be...