Comment : Cross-channel detente defeats a distant memory

'Whether Tesco's or Sainsbury's thinks it worth the pounds 2.5bn candle remains to be seen. Of the two, Tesco has the more credible overseas strategy. It already has a successful, though relatively small presence in France'
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The Independent Online
Michel Deroy sounds like the City's kind of man. Well almost, anyway. To the chairman of Docks de France, even the English are preferable to Auchan, his main French supermarket rival. Auchan is trying to take him over; Monsieur Deroy is determined it should not and is even prepared to countenance a white-knight bid from England to stop the opposition getting a look in. Why, perhaps we are actually going to get a takeover battle. Sounds almost Anglo-Saxon. Which is what Auchan, desperately trying to play the patriotic card, would like Docks de France shareholders to believe. Keep France free of Les Ros Bifs, is its campaign slogan.

To Monsieur Deroy, Agincourt is apparently no more than a dim and distant memory, unlike the rest of us who thought it part of 15th-century history. But there you are; victory is more easily forgotten than defeat. "We are all Europeans now," he said yesterday in an interview which stopped only just short of begging Tesco or Sainsbury's to enter the fray. By French standards this is quite an admission. Normally things are arranged to keep French companies French. But perhaps things are changing. Docks de France seems to regard Auchan as the devil incarnate. They'll come in and close us down, seems to be the general view, while the English might actually invest in us.

Whether Tesco or Sainsbury's thinks it worth the pounds 2.5bn candle remains to be seen. Of the two, Tesco has the more credible overseas strategy. It already has a successful, though relatively small presence in France. But for choice it would rather go for the underdeveloped markets of the more prosperous Eastern European countries (Czechoslovakia and Hungary) to the already overcrowded planes of the Franco-German tundra. Docks de France is also quite a bite even for Tesco, and could require a rights issue.

None the less, this is a rare opportunity to take a quantum leap into the Continental supermarkets business. Now what was that about Agincourt. As Henry V would say:

Gentlemen in England, now a-bed, Shall think themselves accursed they were not here, And hold their manhoods cheap whiles any speaks That fought with us upon Saint Crispin's day.

Eat your heart out Auchan. Here we come.

Lloyd's story won't go away

Just because the majority of Lloyd's members seem ready to vote in favour of the reconstruction and renewal plan at Monday's annual meeting in the Royal Festival Hall, doesn't mean the Lloyd's story will go away.

A number of rebel leaders and their supporters will continue to hold out in the hills, determined to pursue the Lloyd's market for fraud, refusing either to accept the rescue deal or to pay what Lloyd's claims they owe. As American names proved, being bloody- minded can pay. By getting US securities regulators to put Lloyd's over a barrel, they managed to squeeze pounds 40m out of the market over and above what everyone else is getting.

There is still room for the apple cart to be upset. Technically members will be voting on Monday only for a resolution in favour of their own direct pounds 440m contribution to the rescue, not the whole plan. The voting process as a whole lasts six weeks, culminating in a postal poll of all the members. David Rowland, chairman, must carry a convincing majority in the final vote, and that means a lot more than 51 per cent. Even so the war looks now to be largely over. Lloyd's can at last begin to think about what sort of business it wants to be.

The answer, surprisingly to those who have predicted that unlimited liability will disappear and that the market will be taken over entirely by corporate investors, is that some of the old flavour of Lloyd's may well be preserved. This does not mean, God forbid, a reappearance of the ignorant underwriting boobies from the C-stream. But it does mean there is a willingness among richer names to continue. Lloyd's was never meant for the poorer types who mortgaged themselves up to the hilt to join the club in the crazy Eighties. And while we are perhaps still a long way from the days when being a member of Lloyd's really meant something on the Cote D'Azur, there is a renewed sense of self-confidence in the market.

After pounds 8bn of losses, however, even the rich may want some additional safeguards. Lloyd's is already experimenting with new forms of individual membership that limit liability. It must also hand over regulation to an outside body, preferably the Securities and Investments Board, as soon as the law can be changed to allow it. All the same, David Rowland deserves some applause when he stands up to address names on Monday. Not that he will get it. His achievement in bringing Lloyd's back from the brink is none the less a remarkable one.

Why must pay-TV wait for OFT verdict?

Media types have been anxiously awaiting the Office of Fair Trading's findings on the pay-TV market for nearly two weeks now. Yet no white smoke has appeared over the headquarters of John Bridgeman's lair.

Why is it taking so long to announce the results of a six-month inquiry, which sources confirm has been completed? This is not a frivolous question, for there are many commercial interests at stake here. First and foremost, the pay-TV giant BSkyB is truly worried for the first time about government interference in what has been a nice little, or rather big, earner for Rupert Murdoch. Sky soars above all the other players in the pay-TV market: it has the bulk of the satellite transponders, the dominant conditional access system, the best programming. As a result, it has been able to dictate terms to the cable industry, which is desperate for programming to help drive subscriptions.

The OFT has tried, half-heartedly in the past, to correct the balance between the cable industry and BSkyB. But none of the informal undertakings agreed has satisfied cable operators, who pressed the OFT for months before Mr Bridgeman, then newly arrived, agreed to launch a proper investigation.

The worry, now, is that he has lost his bottle. Lobbying efforts by cable operators have been more than matched by the well-paid, persuasive legal experts at BSkyB, who may now have convinced Mr Bridgeman to water down his initial remedies. There is also some speculation that he will do nothing at all. Since the Government did nothing in the Broadcasting Bill to control Mr Murdoch, why should the OFT bother? And after all, the cable industry is still growing.

Others are convinced Mr Bridgeman will come down heavily on Sky, perhaps insisting on similar controls to those imposed on BT, the dominant telecoms operator, in the telecommunications business. There are scores of companies whose commercial futures hang on the OFT's decision. Just how long must they wait for Mr Bridgeman to act?