The man in pink is still favourite to win Lucas

COMMENT: 'Lucas's attempts to rubbish Mr Quarta and BBA before it has even seen the colour of his paper look odd since Lucas regarded him highly enough to approach the American about taking over from its departing chief executive'

The chief executive of BBA is not known around the Square Mile as Bob "give no" Quarta for nothing. A hard-nosed American, he has made a name for himself by taking lacklustre businesses by the scruff of the neck and shaking them ferociously until the bad bits fall out and what is left starts to perform. There are plenty of ex-BBA directors who will testify to his style.

But if, as seems likely, he does launch a hostile break-up bid for fellow car components group Lucas, he will have to give plenty. For a start there is the small matter of the $25m "break-up fee" that will have to be paid to Lucas's preferred partner, Verity, if the bid succeeds. That'll buy quite a few of the pink tracksuits Victor Rice, Verity's chairman, allegedly likes to wear when travelling.

That in itself might seem bad enough but it is mere pin money compared with what Lucas would cost. Lucas is capitalised at twice BBA's market value. No wonder Mr Quarta is rumoured to have had difficulty underwriting his bid in the City.

Even so, Lucas's attempts to rubbish Mr Quarta and BBA before it has even seen the colour of his paper looks odd since it is well known that Lucas regarded him highly enough to approach the American about taking over from Lucas's departing chief executive, George Simpson. The assertion that a merger with BBA possesses no industrial logic is also peculiar given that Lucas and Varity, by all accounts, both approached BBA about buying its friction brakes business.

But for all that this will be a hard one for BBA to pull off. By allowing a head of steam to build up behind the Lucas-Varity deal it has left itself in the position of having to pay considerably more than if it had struck earlier. This in turn begs the question of the level of institutional support it has. Who knows, Mr Quarta may surprise us. After all no one gave Farnell Electronics much of a chance with its reverse takeover of Premier. It boils down partly to who will best revive Lucas. The odds must be with the man in pink for now. He may have to fight a bloody war before winning his bride, however.

Forex markets bet on higher rates

The markets' favourite double act, Kenneth Clarke and Eddie George, kept their audience on edge yesterday. They held their monthly meeting later than usual, leaving the Bank of England no time to cut base rates even if that is what the Chancellor had wanted. Mr Clarke's decision will not be clear until today. They also met for longer than usual - what could they have had to talk about for an hour and a half?

Most economists expect no change in interest rates, but the small chance of a cut made it a good day to take profits on the pound. Even so, sterling is left near its highest level against the mark for 16 months. More than half the currency's recovery from its all-time low last November has taken place during the past five weeks.

It is a striking performance, which although it has little to do with the Great Beef War does have an element of Euro-reasoning behind it. Sterling is benefitting from concern about what may happen to the mark on the way to monetary union. It is as safe a bet as there ever is in forex that the euro will not be as strong as the mark. What's more, the odds are on a Labour government looking more favourably on linking the pound to the euro even if not joining it, which is helping to underpin sterling.

However, the main factor behind the pound's strength is the outlook for interest rates in the UK and abroad. While some City economists think moribund manufacturing performance and low inflation will provide the excuse Mr Clarke needs to cut the cost of borrowing, the markets as a whole are betting on faster growth leading to higher base rates before the end of the year. Indeed, by next June, the futures market expects the level of rates to be back up to 7 per cent.

While interest rates here and in the US seem set on an upward path, European rates could fall further. As it turned out, the German economy didn't fall as much as expected in the first quarter and April industrial output figures were not as bad as feared. Even so, the Bundesbank will probably ease short-term market rates lower, and keep its key rates down for many months to keep the economy on the rails and counteract the effect of budget-cutting.

Some sterling sceptics think the markets are taking too little account of political risks in the UK, from pre-election interest rate cutting to the Government's unpredictable Euro-antics. However, chartists reckon the pound could move as high as DM2.48 in coming weeks. Closer to the likely election date it will be another matter.

The plant is pruned at Courtaulds Textiles

It's a precarious business being a chief executive these days. They might get well paid, but as likely as not they will also eventually get fired. Especially perilous is the position of the chief executive who is also a company man. The outsider, the hired gun, comes to expect the bullet in the back of the head. Perform or die is his prospectus. But the insider expects loyalty for his years of service, and time to prove himself. Increasingly he doesn't get it. When the time comes for cultural and structural change, he is rarely seen as the man for the job. In comes the new broom to sweep all before him.

Noel Jervis, who was unceremoniously thrown overboard by Courtaulds Textiles yesterday, is a case in point. He's been at Courtaulds man and boy. When Martin Taylor departed for Barclays (his timing could hardly have been better), Mr Jervis finally got his chance. It has been downhill virtually all the way since then, culminating in last month's profits warning. He seems to have been promoted above his head.

Mr Jervis, by all accounts, was the archetypal insider chief executive. He knew the industry back to front, he had great ideas on how to grow the company, he knew what the company had to do and where it had to go. But when it came to implementation, somehow or other he just couldn't do it. Nothing happened. He was what in management school speak is known as a "plant", a creative, cerebral type and a lateral thinker. You rarely see people like this at the top of organisations - which is a shame because they have much to contribute. But it is obvious why. They don't get things done and they are poor when it comes to boardroom politics. What John Eccles, chairman of Courtaulds, thinks he needs is more of an SH (you can imagine what that stands for) to run his company.

It is hard to known whether Colin Dyer fits the bill. He hasn't been at Courtaulds as long as Mr Jervis but he is still very much an inside appointment. To replace one insider with another might not seem like much of an advance. Courtaulds perhaps deserves the benefit of the doubt, however. Any company that can admit it is disposing of its chief executive "in order to allow a more effective implementation of strategy" must have something going for it.

Arts and Entertainment
Arts and Entertainment
Judi Dench appeared at the Hay Festival to perform excerpts from Shakespearean plays
tvJudi Dench and Hugh Bonneville join Benedict Cumberbatch in BBC Shakespeare adaptations
Arts and Entertainment
Exhibition at the Centre Pompidou in Metz - 23 May 2012
Is this how Mario Balotelli will cruise into Liverpool?
Ronahi Serhat, a PKK fighter, in the Qandil Mountains in Iraqi Kurdistan
ebooksAn evocation of the conflict through the eyes of those who lived through it
Arts and Entertainment
Poet’s corner: Philip Larkin at the venetian window of his home in 1958
booksOr caring, playful man who lived for others? A new book has the answer
Matthew McConaughey and his son Levi at the game between the Boston Red Sox and the Houston Astros at Fenway Park on August 17, 2014 in Boston, Massachusetts.
advertisingOscar-winner’s Lincoln deal is latest in a lucrative ad production line
Arts and Entertainment
Alfred Molina, left, and John Lithgow in a scene from 'Love Is Strange'
A model of a Neanderthal man on display at the National Museum of Prehistory in Dordogne, France
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Junior Quant Analyst - C++, Boost, Data Mining

£25000 - £35000 per annum: Harrington Starr: Junior Quant Analyst - C++, Boost...

Service Desk Analyst- (Desktop Support, Help desk)

£25000 - £35000 per annum: Harrington Starr: Service Desk Analyst- (Desktop Su...

Junior Quant Analyst (Machine Learning, SQL, Brokerage)

£30000 - £50000 per annum: Harrington Starr: Junior Quant Analyst (Machine Lea...

UNIX Application Support Analyst- Support, UNIX, London

£45000 - £55000 per annum: Harrington Starr: UNIX Application Support Analyst-...

Day In a Page

Air strikes? Talk of God? Obama is following the jihadists’ script

Air strikes? Talk of God? Obama is following the jihadists’ script

The President came the nearest he has come yet to rivalling George W Bush’s gormless reaction to 9/11 , says Robert Fisk
Ebola outbreak: Billy Graham’s son declares righteous war on the virus

Billy Graham’s son declares righteous war on Ebola

A Christian charity’s efforts to save missionaries trapped in Africa by the crisis have been justifiably praised. But doubts remain about its evangelical motives
Jeremy Clarkson 'does not see a problem' with his racist language on Top Gear, says BBC

Not even Jeremy Clarkson is bigger than the BBC, says TV boss

Corporation’s head of television confirms ‘Top Gear’ host was warned about racist language
Nick Clegg the movie: Channel 4 to air Coalition drama showing Lib Dem leader's rise

Nick Clegg the movie

Channel 4 to air Coalition drama showing Lib Dem leader's rise
Philip Larkin: Misogynist, racist, miserable? Or caring, playful man who lived for others?

Philip Larkin: What will survive of him?

Larkin's reputation has taken a knocking. But a new book by James Booth argues that the poet was affectionate, witty, entertaining and kind, as hitherto unseen letters, sketches and 'selfies' reveal
Texas forensic astronomer finally pinpoints the exact birth of impressionism

Revealed (to the minute)

The precise time when impressionism was born
10 best men's skincare products

Face it: 10 best men's skincare products

Oscar Quine cleanses, tones and moisturises to find skin-savers blokes will be proud to display on the bathroom shelf
Middle East crisis: We know all too much about the cruelty of Isis – but all too little about who they are

We know all too much about the cruelty of Isis – but all too little about who they are

Now Obama has seen the next US reporter to be threatened with beheading, will he blink, asks Robert Fisk
Neanderthals lived alongside humans for centuries, latest study shows

Final resting place of our Neanderthal neighbours revealed

Bones dated to 40,000 years ago show species may have died out in Belgium species co-existed
Scottish independence: The new Scots who hold fate of the UK in their hands

The new Scots who hold fate of the UK in their hands

Scotland’s immigrants are as passionate about the future of their adopted nation as anyone else
Britain's ugliest buildings: Which monstrosities should be nominated for the Dead Prize?

Blight club: Britain's ugliest buildings

Following the architect Cameron Sinclair's introduction of the Dead Prize, an award for ugly buildings, John Rentoul reflects on some of the biggest blots on the UK landscape
eBay's enduring appeal: Online auction site is still the UK's most popular e-commerce retailer

eBay's enduring appeal

The online auction site is still the UK's most popular e-commerce site
Culture Minister Ed Vaizey: ‘lack of ethnic minority and black faces on TV is weird’

'Lack of ethnic minority and black faces on TV is weird'

Culture Minister Ed Vaizey calls for immediate action to address the problem
Artist Olafur Eliasson's latest large-scale works are inspired by the paintings of JMW Turner

Magic circles: Artist Olafur Eliasson

Eliasson's works will go alongside a new exhibition of JMW Turner at Tate Britain. He tells Jay Merrick why the paintings of his hero are ripe for reinvention
Josephine Dickinson: 'A cochlear implant helped me to discover a new world of sound'

Josephine Dickinson: 'How I discovered a new world of sound'

After going deaf as a child, musician and poet Josephine Dickinson made do with a hearing aid for five decades. Then she had a cochlear implant - and everything changed