Outlook: Sir Colin gets his timing wrong

HOW Sir Colin Southgate, the chairman of EMI, must lament his fate. At the start of the year he was preparing to ease himself into relaxed semi retirement with his City reputation for creating substantial shareholder value still largely intact. Then came a series of management ructions, culminating finally in the board's rejection of his anointed successor, Jim Fifield, and insistence that Sir Colin stay on as executive chairman.

More unfortunately still, he then rejected a bid from Seagram worth 620p a share, saying he couldn't even consider anything that began with less than a seven. On cue, the sell off in world equity markets began with a vengeance. And finally, to cap it all, Sir Colin has been forced to issue a profits warning, the second this year, sending the shares into a tail spin which took them as low as 320p at one stage yesterday. Sir Colin was just inches away from a clean getaway. He could have been "up, up and away", as he himself puts it, and his timing could hardly have looked more clever. Instead he is left to preside over a grim profits warning and oversee the search for a new chief executive.

It should be pointed out that many of EMI's problems are industry wide and not of its own making. The slowdown in music sales is a global malaise as is the increasingly rapid "churn" of new artists, which mean that few are around long enough to develop a decent, profitable back catalogue of music.

Even so, with the benefit of hindsight, it was plainly the wrong decision to reject Seagram. Whatever Sir Colin does now, his judgement has been called into question. Philips, on the other hand, seems to have displayed remarkable prescience in taking Ed Bronfman's money while it was on offer. The $10bn he paid for PolyGram is beginning to look very expensive indeed.

EMI will no doubt one day achieve that sort of value again, but it could take many years. Still, Sir Colin can always take solace in one of his own records, "Tubthumping" by Chumbawumba, with its rousing chorus of "I get knocked down, but I get up again."

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