Robinson emerges from clash of the egos at BSkyB : OUTLOOK

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The Independent Online
Put Rupert Murdoch's News International, the French group Chargeurs, the British media conglomerate Pearson and the Granada TV and catering firm on the same board, and it is a certainty that the powers involved will find much to disagree about.

With such a collection of egos at the top it is perhaps surprising BSkyB manages to function at all. It also makes for a hotbed of speculation; stories doing the rounds yesterday to explain why Pearson had given up the chairmanship and handed it to Granada only a few weeks after the flotation of the company on the Stock Exchange, were legion.

Unfortunately, the most probable explanation is also the most innocuous. Frank Barlow, the Pearson man who has chaired BSkyB, brought in Greg Dyke to run Pearson's TV interests. They include BSkyB, but he was hardly qualified as a new boy to go straight to the chairmanship. That meant Mr Barlow had to step down from the top job to let him on to the board at all.

Pearson watchers none the less see plenty of hidden meanings in the move - some believe it to be a subtle way of speeding Mr Barlow towards retirement. The politics of the BSkyB board are easier to fathom. John Thornton of Goldman Sachs, the investment bank, is there to hold the ring, and mighty tough he sometimes finds it too. The strongest power is Rupert Murdoch, who holds the position of chief executive through Sam Chisholm - a no-nonsense New Zealander who thinks most Euros are wallies. For Mr Murdoch to nominate his own chairman would make it look like a News International takeover. So soon after the float that was plainly not an option.

Chargeurs, the French shareholder, is widely seen as too obstreperous to be suitable for the chairmanship, though insiders say it has calmed down since the float. With Pearson's new director too junior, that left Gerry Robinson, chief executive of Granada, as the only viable candidate.

In other respects, however, he is an odd choice. Sooner or later, Granada is going to sell its remaining BSkyB shares. A complex agreement with other shareholders means that Granada's first opportunity to sell is at least six months away. For practical purposes Granada will therefore have to stay in for the short to medium term. Even so, to appoint the chief executive of a direct competitor of BSkyB as chairman looks curious at best. Mr Robinson, it appears, was the only choice everyone could agree on. At BSkyB that's progress of sorts.

Fur may fly in war of the petfoods Britain spends a fortune on its pets. Doggies, but more particularly moggies, are fussy creatures. Their refined palates encourage indulgent owners to shell out large sums at the supermarket for brightly coloured tins of gourmet pet food. Such delights as salmon and chive (with jelly), and worse, are now on offer. It seems a good, growth business to be in. Dalgety certainly thinks so.

Under its chief executive, Richard Clothier, the company is streamlining itself to concentrate on just three businesses: petfoods, food ingredients and agri-business. In pursuit of this strategy, the company plans to sell its Golden Wonder and Homepride businesses so it can add the Felix and Fido brands to its Spillers portfolio of petfoods. Recently Mr Clothier acquired the Paragon Petcare and Nido businesses in Spain. In-fill acquisitions are also planned for the food ingredients business.

So far the strategy looks a sound one. The snackfood business Dalgety plans to leave is notoriously cut-throat and the company has admitted it is just too small to battle internationally with the likes of PepsiCo (which owns Walkers Crisps) and United Biscuits which owns the KP brand. The fancifully titled Crisp Wars have already damaged several players - witness the near £7m loss announced by little Bensons Crisps on Thursday. Even the once proud Golden Wonder, owned by any number of companies in recent decades, now has a market share of only 10 per cent and slipping.

In petfood, however, Dalgety reckons it can hold its own with the likes of Mars. The scope for cost-cutting at Quaker looks substantial. Certainly Dalgety believes it is overmanned. Quaker's European strenths also dovetail neatly with Spiller's UK stronghold. The question is whether the European market can be expanded the way Dalgety hopes.

In the UK, prepared petfood accounts for nearly two-thirds of all food consumed by the nation's cats and dogs. In countries such as Italy and Spain it is less than 30 per cent. Dalgety is banking on convincing the southern Europeans that feeding il coccolato on salmon and chive (with jelly) is a better idea that throwing it scraps from the table.

Another potential problem is possible retaliatory action from Mars. This is a company known for aggressively defending its market position. To spoil Dalgety's grand plan it will not hesitate to cut prices substantially. Mr Clothier admitted as much yesterday and also conceded that he had set money aside for such an eventuality.

Even so, a brutal price war could easily upset the pleasing symmetry of Dalgety's strategy. For the time being, however, Mr Clothier has to be given the benefit of the doubt. Once regarded as a dog of a company, Dalgety now has a deal that promises to change a few minds.