By any measure Northern had won. The simple fact is that less than 20 per cent of Northern shareholders who were exposed to the full glory of CalEnergy's offer were prepared to accept it. The bulk of its support came from the 30 per cent it snapped up in dawn raids right at the start of the bid. In the end CalEnergy secured support from less than 30 per cent of the free shares.
It was only then that the Panel decided to pick up it wand, don its wings and a frilly skirt and step into the limelight. But not only did the Panel decide that Cinderella should go to the ball. It also decided who should play the part choosing to cast CalEnergy as the heroine and leave Northern and its advisers as the ugly sisters.
In a most bizarre judgment the Panel appears to have ruled that there were no irregularities, no breaches of the code, indeed nothing that would have caused it any offence. However, it still decided to extend the CalEnergy offer and keep it open until Christmas Eve and pave the way for it to snatch victory.
At the heart of the debate that kept the Panel in full session until midnight on Friday were the activities of BZW, one of Northern's advisers. It is well known that BZW had been judiciously mopping up pockets of Northern shares during the closing days of the bid. This was all open and above board. CalEnergy did not like the tactic but the Panel ruled that BZW had behaved perfectly properly particularly as it made no secret that this was a spoiling technique.
Suddenly the Panel stumbled across new information which made it look at those share purchases in a new light. That new information was volunteered by BZW in a refreshing spirit of openness. My understanding is that the Panel accepted that this new information would not have changed its ruling on BZW's share purchases. It saw nothing wrong in BZW's actions. Its only concern was that it wished it had known earlier about Northern's decision to hand over the modest fees still outstanding from BZW's last defence of the company.
In other words the Panel accepted that BZW acted entirely properly throughout. Its only wish was that BZW had told it earlier. However, despite its endorsement of BZW the Panel still pressed ahead with a ruling which will alter the course of the bid.
Not since Minorco's battle for Consolidated Gold Fields has there been such blatant disregard for the wishes of shareholders. In that case Minorco actually secured 53 per cent acceptance ( including the 29.9 per cent it already owned before launching the bid) but the takeover was thwarted by the ruling of Judge Michael Mukasey in New York, who in essence blocked the bid.
There is no doubt that CalEnergy was mightily disappointed by missing out on its target by such a slim margin. But that was a reflection of the conduct of the bid over two months not over two days. In the end CalEnergy misjudged investor climate in the electricity sector. CalEnergy spurned the opportunity to secure an agreed deal (which has served East Midlands and London Electricity shareholders so well in the face of US bids) and then made a final offer which did not fully reflect the value vested in Northern. It is hardly surprising then that it lost.
There is a danger now that a conspiracy of silence will engulf the last 48 hours of the bid leaving investors in a vacuum about what happened. This is unsatisfactory. As far as the Panel is concerned the bid has been conducted fairly and openly. There is no justification, therefore for changing the rules.
One way forward is for Northern to appeal against the ruling but there is a better way to deal with the Panel's lapse in concentration. Rather than expose the Panel to potentially damaging further conflict those investors who have accepted the bid should withdraw their acceptances. The investment community has benefited from the certainty the regulatory regime has provided. The Panel has made an unusual error of judgement, for which in such a tight situation it can be forgiven. The shareholders have already given their view on the bid. They should now take the pressure off the Panel and deliver the same verdict again by withdrawing their acceptances.
SCROOGE was not the only person to have mixed views on Christmas. Important financial boost though it may be for the leisure industry it is also something of a pain for those of us who are regular contributors to this particular sector of the economy.
From early December onwards it becomes increasingly difficult to get a drink at a bar, a table at a restaurant and a taxi to take you home. The bars are thronged with customers wearing tinsel, reindeer ear muffs and Santa Claus hats, the restaurants will not take bookings for less than a party of 24 and the taxis are particularly nervous about picking up passengers; understandably given how much time many would-be travellers have spent in the bar wearing tinsel, reindeer ear muffs, etc.
I would be the last person to obstruct the economic prosperity of the leisure sector and all those who take advantage of its facilities at this time of year. All I would ask is some recognition for those who provide year-round patronage.
I therefore propose that the leisure industry tales a leaf from the retailers' book and introduce some kind of loyalty card which would be akin to a frequent revellers programme. This would entitle those of who believe that a taxi is not just for Christmas to go about our business unimpeded by part time party goers.
I envisage special fast track lanes in pubs that takes us straight to the bar, preferential booking rights at restaurants with no compulsion to pull a Christmas cracker and dedicated taxis to whisk us away from the town centre scrummage.
Merry Christmas.Reuse content