Outlook: LucasVarity

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The Independent Online
IT SEEMS to have become quite the thing for companies to make highly conditional takeover bids. Thus we have Trinity's supposed promise to come back and talk turkey with Mirror Group if Monty is made to go. Not that Trinity has said this publicly. So far we only have the Sunday press's word for it. And yesterday we had a similar ploy from Federal Mogul concerning the other Victor - Victor Rice of LucasVarity.

Dick Snell, chairman of Federal Mogul, says he's prepared to bid 280p a share, but only if LucasVarity agrees and allows him in to do a full due diligence. It goes without saying that this bid is framed as a takeover, which would presumably involve Victor Rice and the rest of his board making a rapid exit. Mr Rice may have had to struggle with his aim of returning to the US, but even he had little difficulty in rejecting this entirely frivolous proposal.

Nor did his chairman, Ed Wallis, turn round and accuse him of standing in the way of shareholder value by so doing.

Obviously it is in no one's interests to waste huge amounts of money fighting ultimately pointless City takeover battles, and it is certainly true that quite often managements are reluctant to agree proposals which might benefit their shareholders. But the system is biased enough against vulnerable executive teams, without allowing bidders to make these virtual offers. The Takeover Panel should force Federal Mogul to put up and let the arguments be put, or shut up.

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