So the Deutsche Börse's bid for the London Stock Exchange is collapsing around Werner Seifert's ears. But is this a good thing?
For the shareholders of the LSE, no. They were rather hoping that a bidding war would break out between the Germans and their Franco-Dutch rival, Euronext. This hasn't happened and will not happen. By staying schtum, Euronext's boss, Jean-François Theodore, has outmanoeuvred Herr Seifert. Hopes of 650p a share now look remote. Euronext will surely have to offer more than the 530p a share the Börse put on the table - or else the LSE is in no position to recommend the bid - but not a great deal more.
For the main customers of the LSE, the stockbrokers and investment banks, a Euronext purchase seems preferable to a Börse buy (this is because of complex things like clearing and settlement). But what they'd really like is for the LSE to remain independent. Well, you silly buggers, you should never have let it demutualise. As soon as it floated it became subject to the whim of investors, who will sell out to the highest bidder. As people who advise investors, companies and bidders, you should know that.
For UK plc, this is bad news. It's one thing letting almost all the leading banks in the City fall into foreign hands - but the Stock Exchange? The Blair Government's "ownership-neutral" policy - eschewing the idea of national champions - is understandable. But at times it looks defeatist.
For the future of how companies are run, this is a terrible situation. What you have is a group of hedge funds essentially blowing the Börse's strategy off course. In the process, they will bring about the resignation of a chief executive who has steered the exchange from being a backwater to a profitable force in world securities.
Many will argue that it was the intervention of Fidelity - that epitome of the sort of well-intentioned, long-term, blue-blooded, white-shoed investors who are good for corporate governance - that killed off the Börse's bid for the LSE. Yet Fidelity would not have publicly come out against this bid if The Children's Investment Fund and Atticus - hedge funds to their socks - had not so publicly fought like cats against the LSE bid first.
You can argue that hedge funds should not be so short-termist as to kill off the Börse's strategic move to make a fast cash return. But that's like telling tigers to turn vegetarian. It's not in their nature.
With the increasing amount of money going into hedge funds, and their willingness to take risks and go public with their views, more of these situations are going to blow up. The basic position of these short-term investors is that they do not want companies in which they invest to make large acquisitions. This is because they hope that these companies will be taken over themselves. It's not rocket science. It's just hard-nosed.
Because they are more active, this means that a £7bn fund such as GLG has as much, if not more, influence than traditional investors 10 or 20 times its size. This is not healthy. But it is reality. And we'd better get used to it.
Live fast, lose pension
The orders under which a group of alleged terrorists are detained at Belmarsh jail expire on 14 March. The Home Secretary's attempts to bring in fresh laws to replace these orders face a tough challenge in Parliament this week.
Not as high profile, but almost as urgent, is the debate on the fine print to do with the Pensions Act, which also takes place this week. At play are the details of which pension schemes will be part of the new Pension Protection Fund, the safety net for pensioners. The PPF is due to come into force on 6 April.
This eleventh-hour discussion has pension experts tearing their hair out. Schemes that rely on companies that have gone bust - Allders is a classic example - may or may not be covered. Final salary schemes that are closed, but are still able to pay pensions, may or may not be covered. Certain definitions are not clear, and may still not be clear once the regulations are sent out by the Department for Work and Pensions.
It's a shambles, caused by pushing through the Pensions Act too quickly. Just like detention without trial, this is far too important to be legislated in a hurry.Reuse content