Institutional investors which held stakes in Argos are surprised at the actions of Lord Wolfson, GUS chairman. "It looks like he is mad enough to want to get even," one said. "It looks like he is intent on dragging the [Argos] directors through the dirt. He will probably find that very difficult to do."
However, it is understood that GUS may continue to press its case. It has sent letters to the former Argos directors, including Stuart Rose, now chief executive of the Booker cash-and-carry group, and Sir Peter Birch, the former Abbey National chairman, expressing its concern over various statements. It is reserving its right to take legal action against the directors and Argos's advisers. These were Schroders, which acted as financial advisers, and Herbert Smith, the company's lawyers.
However, the Panel's view that its rules have not been broken is likely to undermine any case GUS may bring.
GUS presented its case to the panel some months ago, saying it was unhappy with some comments by the Argos defence in the battle. These included prospects of the Argos business in Holland and the home delivery operation and an Easter trading statement. Since its victory GUS has closed the Argos operations in Holland.
GUS has claimed that the Easter trading statement was a key reason for it increasing its offer for the company from pounds 1.6bn to pounds 1.9bn. However, institutional investors recall that the main reason was the rise in the stock market in the period after GUS's initial bid
The Takeover Panel's Rule 19 says that all statements made during bid situations must be accurate and fairly presented. There is also the so- called "materiality test" under which any change that occurs within the business that might have a material affect on the company's financial position must be disclosed. Every statement made in a takeover battle is scrutinised by the company's advisers to ensure they comply with the panel's rules.
One fund manager said: "In bids people put a positive gloss on their affairs and it is up to the buyer to be aware of that."
GUS shares fell 35p to 655p on fears that the Argos business might be trading badly and that this has prompted the legal threat.