After a poor run this year, that is almost exactly Burford's market value, making now as good a time as any for MEPC to strike. With the Freeman brothers willing to cash in their chips in the sector's other shooting star, Argent, it was plainly worth a call to Burford's founders, Nigel Wray and Nick Leslau, to test the water.
It was always more likely than not, however, that the talks would founder. Even the business case for putting the two companies together was questionable. MEPC would be able to squeeze few efficiency gains out of the austerely run Burford, whose entrepreneurial management skills would probably be wasted on the larger company's disparate collection of properties.
The business logic was one obstacle, but it was probably a lesser one than the deafening clash of egos that tends to characterise any meeting of property folk. Getting two sides to agree on who should take the top jobs is often the biggest challenge in merger negotiations, but never more so than in the property world, where businesses are more or less openly rung more for the benefit of their managers than their owners.
There are more than 140 companies quoted in the property sector, of which 37 are valued at less than pounds 10m. These are businesses whose assets amount to little more than the value of a decent-sized terrace in one of London's better suburbs and which are no more complex than that to run.
That these uncomplicated little businesses have highly paid boards, enjoying smart head offices and smarter Mayfair lunches, makes no economic sense. In any other industry, such an inefficient state of affairs would have been resolved long ago by a rash of takeovers. Turkeys, though, do not vote for Christmas and until investors kick up more of a stink, there is little prospect of the sector's very long tail shortening to a more reasonable length.
Butlins move could be money down the drain
What on earth do you do with a tired old brand like Butlins? This is a business with a special place in British social history. Whether it's for Hi Di Hi, losing your virginity, red coats, or just never having been to one, there are few adults for whom the name means nothing. Unfortunately, instant brand recognition is not the only ingredient in business success, and today Butlins stands not for the time or your life, but for unemployment, social deprivation, tackiness and vulgarity.
Is it really possible to reinvent for the 21st century a holiday concept born so unambiguously out of post-war austerity? Plainly even Andrew Teare, chief executive of the company's parent, Rank Group, only partially believes so. Under ambitious investment plans for the five Butlins holiday camps that remain, two of them are to lose the Butlins name entirely. Nonetheless, the pounds 139m planned investment in the other three is by any standards a massive gamble.
Nobody doubts that there is anything but a huge market out there for the inexpensive British family holiday, but is a mixture of Haagen-Dazs Cafes, Burger Kings, Enid Blyton and Harry Ramsden fish and chips, all under "an impressive new weatherproof canopy structure", really going to cater for it? Rank is confident the whole thing will meet its 15 per cent return on capital benchmark, but the City can hardly be blamed for scepticism.
This could as easily be money down the drain as well invested and the move has rather highlighted growing doubts about what Mr Teare, now 18 months into the job, is trying to do with Rank. Spraying money around on the group's hotch potch of unrelated and unfocused leisure activities in the hope that one or some of them might come good is not much of a strategy. If he is to survive, he needs to be much clearer about what links this disparate rag bag of declining brands and why anyone would want to spend good money on trying to revive them. Mr Teare still has a mountain to climb persuading the City that Rank has a vibrant future ahead of it. Ho di ho!
Pentland, this is your chairman speaking
Message to outside shareholders in Pentland Group from your chairman, Stephen Rubin.
"First the good news. I am acutely aware that since my spectacular success with Reebok in the 1980s, our share price has gone nowhere. I'm told that we've underperformed the rest of the market by 40 per cent over the 1990s despite my best endeavours to build a new family of sports and leisure brands post the Reebok disposal. I'm not admitting failure, you understand, but I have to confess that we are not yet another Nike. So it is with great sadness and regret that I have decided to do the Cadbury correct thing and split the role of chairman and chief executive. I've never gone along with this kind of nonsense myself but I can understand why you blighters think it right and proper in publicly quoted companies.
"Now the bad news. Up yours! The new chief executive is to be my son, Andrew. No, seriously, I'm really going to appoint him, but I did check it out with some leading institutions like the Pru first and they said it was perfectly all right. OK, they didn't really say quite that but they did concede that since my family is still the majority shareholder in Pentland, there's not a lot they can do about it. I know this is bound to raise eyebrows in the City but I've never made any pretence that this is anything but a family company. Anyway, Andrew is a Harvard MBA, so what more could you want?
"I have absolutely no doubt that he is the right man for the job. It is entirely fortuitous that he just happens to be my son as well. You'll see. I'll be entirely vindicated within a few years. And if you don't like it, that's your lookout. You are in a minority, after all."
Make things too tough and BA will walk
After a break for the summer holidays, hostilities have been resumed in the war of words over British Airways' planned alliance with American Airlines. Delta Air Lines, which incidentally got its fingers badly burnt attempting a similar tie-up with Virgin Atlantic, wants its two rivals to surrender as many as 50 round trips a day from Heathrow as the price for regulatory approval.
Pigs might fly, as they say. But since the outcome of this particular dogfight does not look like being settled until well into the autumn, Delta has every incentive to maintain maximum pressure on the alliance partners and the competition authorities on either side of the Atlantic. Where the tactic risks coming unstuck is that if the authorities are encouraged to take too tough a line, BA and American will simply walk away. In that case there will be no open skies agreement either and no opening up of fortress Heathrow, the real goal for Delta and others.Reuse content