Business View: No level playing field in the game of French cricket

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The Independent Online

It's just not cricket. First those Frenchies contact a chap on the first day of the Lord's Test and try to persuade him to sell his company. Then, after telling them they've not put enough euros on the table, they go and launch a hostile bid just as the second Test is about to start.

Now to be fair to Saint-Gobain, the French glass maker seems almost embarrassed about having to go over the heads of the directors of BPB with its £3.7bn offer. Its awfully charming chief operating officer, Pierre-André de Chalendar, has been given the task of selling the deal over here, and he seems most apologetic about how things have turned out. "We have the greatest respect for the BPB management," he says. "I wish there was another word to use than 'hostile'." And, he admits: "We should have known more about cricket."

Still, should we complain? It may only be the plasterboard market. And the offer price is unlikely to go above the £4bn mark. But this is still a hostile bid for a FTSE 100 company. And you don't get many of them. Indeed, you probably have to go back to Lafarge's capture of Blue Circle to see a hostile bid for a FTSE 100 company succeed. And what did that offer have in common with this? The sector was building materials. And the bidder was French.

"What's the problem with that?" you may ask. If our French cousins want to pay more for a British company than our fine institutional shareholders think it is worth, then it is their look-out. A year ago, BPB shares were languishing at half their Friday close of 735p, and they were only around 520p before the Ashes started. In their classic way, the City investors, who thought BPB was pricey at 520p, now think it is too cheap at 735p. But if Gobain puts 760p or so on the table, these stout yeomen will suddenly gain a taste for Brie and baguettes.

If Gobain does win BPB, there will be two awful ironies.

The first is that Gobain is only in a position to bid for BPB now because it feels that it is close to drawing a line under its legacy of asbestosis claims in the US - a problem that BPB was almost unique in its industry in having avoided. The French are confident because a bill is being presented to the US Congress proposing a $140bn settlement of all outstanding claims. However, the latest noises coming from Capitol Hill are that three Democratic senators on the committee framing the bill fear that $140bn may not be enough money. So Gobain's confidence may be premature.

The second is that, on the eve of Gobain going hostile (sorry, Monsieur de Chalendar), the French Prime Minister, Dominique de Villepin, suggested that some national assets were so precious that they should never fall into foreign hands. He was thought to be referring to Danone, which Pepsico is said to be eyeing, but it is not hard to see this protectionist attitude being stretched to the likes of Gobain and Lafarge.

As they say at Edgbaston: "That's French cricket for you."

Sir Fred sticks his neck out

Is Sir Fred Goodwin a megalomaniac? Or is the analyst who threw the accusation at him last week no more than a troublesome flibbertigibbet? The answer is somewhere in between. But where in between is rather crucial for the Royal Bank of Scotland's chief executive.

No one can doubt that Sir Fred had a brilliant first half-dozen years at the helm of RBS. He helped turn around a bank that was going nowhere: the NatWest acquisition was one of the best-executed deals in British banking history. But recent purchases - particularly Charter One in the US - have not convinced, and the purchase of the Bank of China stake could be his Waterloo.

Many bankers admit to frustration at the City's lack of willingness to back overseas purchases. But few will take on the shareholders face to face. If Sir Fred does, people will start to believe the analysts' accusation of megalomania and he may find himself looking for a new job.

j.nisse@independent.co.uk

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