Review of the year, part 2

CEOs pay the price as a turbulent year takes its toll on big hitters
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The Independent Online

July

July

Standard Life saw off the carpetbagger Fred Woollard, when its members defeated a demutualisation motion that would have given them windfalls of up to £6,000 each.

Bradford & Bingley's 2.6 million members, however, decided to take the cash, around £730 a piece, and voted for the building society to be converted into a bank.

The merger of WorldCom and Sprint was scuppered by European and US regulators. Merger talks between Commerzbank and Dresdner Bank collapsed.

Smith & Nephew said it would sell its consumer businesses and return £415m to shareholders.

The main high street banks, led by Barclays, climbed down over their threat to charge for withdrawals from hole-in-the-wall cash machines, after pressure from Government and consumer groups.

John Vickers, the Bank of England's chief economist, was appointed as the new head of the Office of Fair Trading.

Equitable Life put itself up for sale after a defeat in the House of Lord over guaranteed annuity policies, which left it with a £1.5bn funding gap.

Axa, the insurance group, found itself with too much money and unveiled plans to distribute part of its £1.7bn of surplus cash, known as orphan assets, to policyholders. Consumer pressure groups said Axa was not paying out enough.

August

Standard Chartered announced a restructuring plan that will cost £420m and 6,000 job losses outside the UK.

ICL had to shelve, once again, its plans for a London flotation. Meanwhile, the Homebase DIY chain was put up for sale by J Sainsbury.

Paul Chisholm announced he would quit as chief executive of Colt Telecom, departing with some £62m in profits from share options.

British Telecom said it would take control of Viag Interkom, the German mobile phone group, after adding a 45 per cent stake, bought for £4.4bn, to its existing 45 per cent holding in the company.

On the telecoms front, AltaVista blamed BT for having to withdraw its offer of unmetered internet access in the UK. While in Germany, the auction of third-generation mobile phone licences raised £31bn, £25bn more than expected.

The tussle over the separation of Arthur Andersen and Andersen Consulting was resolved by a Paris court ruling. Andersen Consulting had to give up its name and pay Arthur Andersen £550m. The sum was less than expected and Jim Wadia, Arthur Andersen's head, subsequently resigned.

The unemployment rate in Britain fell in July to 3.7 per cent, its lowest level since 1975.

September

Invensys saw more than £3bn wiped off its stock-market value after a profits warning.

The G7 group of leading industrialised nations launched a co-ordinated intervention in the foreign exchange markets to support the euro.

British Airways abandoned its takeover talks with KLM.

Thames Water was bought by the German utility RWE.

Smiths Industries unveiled plans to take over rival TI Group.

The Swedish OM Group made a surprise takeover bid for the London Stock Exchange. London's agreed merger with Deutsche Börse fell apart and Gavin Casey, the LSE's chief executive, resigned.

Credit Suisse First Boston agreed to buy Donaldson, Lufkin & Jenrette for $11.5bn (£7.bn), while JP Morgan was swallowed by Chase Manhattan for $34.9bn (£24.6bn).

Retailers revealed a tough month, with Allan Leighton quitting as president of Wal-Mart's European operations. Peter Salsbury was removed as CEO of Marks & Spencer.

Coats Viyella, a Marks & Spencer supplier, exited the clothing industry, with the loss of 2,000 jobs. Kingfisher said it would break itself up, with Woolworths and Superdrug put into one company, and B&Q and Comet in the other.

Internet traders did not escape the lean times, with Clickmango, the health and beauty online retailer, ceased trading.

Granada Compass announced the £3bn auction of its hotels.

October

Royal London, the mutual assurance company, finally clinched victory in the protracted battle for Scottish Life with a £1.1bn offer.

Vodafone agreed to pay £1.7bn for a 2 per cent interest in government controlled China Mobile Hong Kong as part of a wider strategic alliance.

Marks & Spencer continued to have a bad year, with its shares sliding below 200p for the first time in a decade.

Marconi moves to sell off most of its manufacturing plants to focus on technology.

Greg Hutchings, chief executive of Tomkins, was forced to resign after being accused of "corporate excesses" and abuse of executive perks. Competition Commission issued good news to supermarkets, declaring that there was no evidence of excessive profiteering.

British Airways announced it would reduce capacity by 10 per cent and cut 1,200 jobs in a bid to restore profitability.

Despite a charm offensive on the City of London, OM Group's £1bn bid for the LSE failed to persuade shareholders.

Meanwhile, the £50bn float of Orange was delayed until 2001.

Texaco agreed a £29bn take-over of Chevron.

Wal-Mart, owner of Asda, alarmed suppliers with plans to develop online supply chains.

The Bank of England's MPC voted unanimously to keep interest rates at 6 per cent.

Reed Elsevier took control of Harcourt General, a US science and educational publisher, for £3.9bn.

November

Stephen Byers, the Secretary of State for Trade & Industry, scrapped the moratorium on gas fired plants and approved a £2bn investment in six new energy projects.

EasyJet shares gain 10 per cent on market debut, valuing the discount airline at £850m.

BT launched a major reorganisation of its business, saying it would split into six divisions, creating opportunities to float four new businesses. It also unveiled a £10bn debt reduction plan.

At the same time, the auction of the fixed wireless licence flopped, raising only £38m and leaving half the country with no service provider.

Bank of Scotland spurned £11bn bid approach from Abbey National.

Following a series of disasters on Britain's railways, Gerald Corbett, chief executive of Railtrack, resigned.

Invensys issued a last ditch attempt to quell a shareholder revolt by spinning off a power unit, worth an estimated £3.5bn.

Sema Group was also trying to weather adverse conditions having just issued a profits warning that chopped its market capitalisation in half to £1.8bn, ensuring its ejection from the FTSE 100.

Bertelsmann approached EMI about a merger after a deal with Time Warner was called off due to regulatory opposition.

Hans Snook, chief executive of Orange, said he would quit in 2001.

December

Cazenove, one of the City's last remaining independent firms, announced it would seek a flotation next year.

Equitable Life, Britain's oldest life assurer, was forced to close its doors to new business because of its crisis over guaranteed annuities.

Bradford & Bingley, the former mutual floated, creating windfalls worth £620 for members.

WH Smith faced a loss of £200m of business as opposition to its national distribution plan grows among publishers.

Freeserve succumbed to a £1.6bn takeover by Wanadoo, the French internet group.

The Financial Services Authority warned banks to be "acutely aware" of their exposure to telecoms, which have borrowed £700bn since 1997.

As part of its restructuring, BT closed a record-breaking $10bn (£7bn) bond issue.

C&N Touristic bought Thomas Cook for £550m.

The Bank continued to hold the base rate at 6 per cent, while George Soros predicted that the euro had turned the corner and could rally.

Vauxhall signalled one of the year's biggest rounds of job losses when it said it would end car production at Luton. The move is expected to leave 6,000 workers unemployed.

Diageo and Pernod Ricard bought Seagram's spirits division for $8bn.

US regulators approved the £75bn merger of AOL and Time Warner, while Carlton Communications sold Technicolor to Thomson Multimedia for £1.4bn.

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