Comment: A retail family affair that could end in tears
`It was the dream of Lord Weinstock and Lord Hanson to hand an empire on to a son, and an uncomfortable yoke it proved to be. Simon Wolfson may yet have cause to rue his famous father'
Wednesday 05 February 1997
NEXT PLC DIRECTORS
Next plc is pleased to announce the appointment of Simon Wolfson as an Executive Director.
The retail empire Next is famously economical when it comes to communicating with the outside world. So it proved once again yesterday after the above two-line announcement flashed bashfully up on dealers' screens just after 8.30am to be followed by complete radio silence.
Hang on a minute, though, isn't there someone called Wolfson already running Next? Oh, very well. Since you ask, Lord (David) Wolfson of Sunningdale is the chairman. And is he by any chance related to Simon? You'll find they're father and son.
Sorry to push you on this but do you have a few more details about Simon? Such as? Well, such as his age, his business background, his retail experience and what qualifies him to help run a pounds 2bn Footsie 100 company apart from an accident of birth? Mmmm. We'll have to get back to you.
And get back, finally, they did in the person of the chief executive, David Jones, to reassure us that nepotism has no place at Next. Lord Wolfson had nothing to do with the appointment, having relinquished his executive responsibilities last August to go off and take over Great Universal Stores from his cousin, Lord Wolfson of Marylebone. What's more, Simon may only be 29, but boy has he worked miracles for the company since he joined six years ago fresh from university. Just ask any analyst or shareholder who has met him.
Yesterday, they proved to be rather thin on the ground, Simon being as much an unknown quantity in the City as he was for most of the day to the Next publicity machine.
The appointment may not have been directly in Lord Wolfson's gift but his presence looms large at Next as one half of the duo that rescued it from the wreckage left behind by George Davies. It is is hard to resist the conclusion that Next has decided, like father, like son.
It was the dream too of Lord Weinstock and Lord Hanson to hand an empire on to a son, and an uncomfortable yoke it proved to be. Simon Wolfson may yet have cause to rue his famous father.
A torrent of oil misinformation
The half-dozen fund managers who will decide Clyde Petroleum's fate face an unenviable challenge in separating fact from fiction in the torrent of misinformation and snide innuendo that both sides have produced in the run-up to yesterday's final 120p-a-share offer from Gulf. With so much transparent manipulation of data, the non-specialist investor has learnt to take both sides' arguments with a bucket of salt.
The old adage about damn lies and statistics has never been more true than in this tussle, with investors treated to the full panoply of arcane valuation methodologies and test-well data. .
The spin doctors have had a field day, too, with Gulf's acquisition in the market yesterday of 15 million Clyde shares paraded on the one hand as Clyde's shareholders throwing in the towel and on the other as a dismal failure of a dawn raid, no more than the shaking out of a handful of arbs. With Clyde's fate so finely balanced, there won't be any let-up for the forked tongues for the next two weeks. Clyde, whose directors sold shares just before the bid at around 80p, has plainly made some ambitious claims about its value, used some pretty heroic assumptions to get to figures as high as 160p a share and taken a rosy view of a hole in the North Sea bed that BP among others was happy to let go for a relative song.
Gulf and its advisers have been equally selective, however, and made some sweeping criticisms of Clyde's numbers on the basis of sketchy test data bought off the shelf from the DTI. In cases such as this, the share price is often the best guide but at 120p last night, bang on the offer price, it is as confused as the rest of us. If there is a white knight it is well submerged, and if Schroders and PDFM, which own a third of the company between them, don't nibble the shares could soon be back below a pound. If a rival bid doesn't emerge by the end of the week, selling in the market seems the best option.
A tale of two rate-rise decisions
The amazing record of the US economy in achieving steady growth and low inflation for more than five years is often chalked up to the skill and judgement of one man, Federal Reserve chairman Alan Greenspan. In the UK, too, the responsibility for steering the economy rests with just one person. By chance Kenneth Clarke and Mr Greenspan are today both considering whether or not they will have to raise interest rates to counter future inflation. Although on each side of the Atlantic one individual holds the reins, there could not be a greater contrast between the way monetary policy is set. For one thing, it is a fairly safe bet that UK base rates will not change after today's meeting between Ken and Eddie. . In the US, on the other hand, there is real uncertainty about the outcome of the meeting of the Fed's open markets committee.
Paradoxically, the near-certainty that UK rates will not move whereas US rates might rise reflects the fact the monetary policy in this country is far more arbitrary. Everybody knows that Mr Greenspan is an inflation hawk and that the Fed will exercise its independent judgement. If there is a true inflationary danger, it will tighten policy. The doubt is about how the chairman will interpret the data.
In the UK the closeness of an election, the pound's strength and mixed recent statistics will allow Mr Clarke to overturn the forthright advice of the Bank of England, if he wants to, for the fourth month running. The system of monetary meetings and published minutes is no match for a desperate Government. Chances are the Chancellor's choices will not be as serendipitous as Mr Greenspan's.
Why pay advisers for this leaky strategy?
Why get a dog and then bark yourself? The thought might just be occurring to the directors of Triplex Lloyd as they mull over the telling-off handed down by the Takeover Panel for their tactics in the bid for William Cook.
Reprimands from the Panel are all part of the fun when takeover battles get as dirty as this one and, although the advisers on both sides will deny it, they are privately worn like badges of honour.
The curious aspect of this case is why, having paid a king's ransom for the services of Schroders and Citigate, Triplex Lloyd pressed ahead with the leaking of its letter to the DTI when its advisers could have warned that it was entering dangerous territory.
Schroders' excuse is that it did not know about the leak until after it had happened. Citigate's appears to be that it was only obeying orders. Either Triplex Lloyd is paying for advice which it is ignoring or it is getting poor advice.
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