Certainly life would be much easier if this were a straightforward takeover bid conducted under Takeover Panel rules. Then we would be able work out quite easily what the rival alternatives were worth, and by day 60 the shareholders would decide the outcome. Unfortunately we are not. Rival bids for Scottish Amicable do not lend themselves to easy comparisons. The up-front bung can be identified but the back-end maturity value for policyholders cannot. There are many intangible considerations that must be taken into account before an informed judgement can be made. Do not forget, also, that the needs of a foreign bidder seeing Scottish Amicable as part of its international expansion are very different from those of a domestic bidder viewing the deal as part of a wider consolidation.
This lack of easy transparency puts the board and its advisers under some pressure. On one hand, it will want to be as open as possible but on the other it will need a high degree of sensitivity to the demands of the bidding companies who may not want their innermost secrets shared with the outside world. Given that there can be only one winner, do the losers want to expose details of their long-term strategy and the depth of their pockets?
It is essential that Scottish Amicable secures the trust of its policyholders and the trust of the rival bidders. The last thing needed is for the bidders to be tempted to play games. They must have confidence that the auction process is both fair and equitable so they can make a bid that they consider represents fair value.
There are three ways in which those bids can be made: blind, in public and in private. The bidders might be concerned about going too public with market-sensitive information. If they were forced to bid blind and agree to a drop-dead date they might feel cheated. There is some merit in each being allowed to see privately what the other has offered in order to rethink their own bid.
These are issues that Scottish Amicable and its advisers are well aware of and will be wrestling with over the coming days. Those who think they will act with anything other than the utmost integrity and professionalism are making a significant misjudgement.
Mind the shop
National Westminster Bank and Tesco will sit down this week and negotiate the terms under which the retailer can escape from its contract with the banker that sets out the arrangements for running the Tesco Clubcard Plus debit card. Those discussions will be robust but amicable. Tesco wants out of the contract so that it can transfer the business to the Royal Bank of Scotland, with which the retailer established a joint financial services venture last week. There is a price to be paid for breaking your contract and Tesco is about to find out what that is.
NatWest may miss the debit card business, which is quite lucrative, but it will not miss joining Tesco in a grander foray into the world of financial services. Indeed, NatWest was given first refusal by Tesco on an expanded venture and politely refused. We will not know whether NatWest has been visionary or blinkered until well into the next century.
There is something of an apparent contrast between the nimble, creative retailer and the Luddite plodding banker. Or is there? NatWest rightly refused the opportunity to get involved in a full retail banking venture because it already has its own retail banking venture, which has been around for 300 years. There seems little point in competing with yourself not only in banking but also in the broader financial services that have attracted the banking sector's attention.
NatWest has dipped its toe in the retailing water and is not inclined to venture any further lest it gets out of its depth.
The fact is that changing technology is going to have a dramatic impact on both the retailing and banking sectors. However, they will be affected in different ways. NatWest is probably better equipped to deal with those changes with a clarity of purpose that could only be distorted by an expansion of its relationship with Tesco.
From Tesco's perspective, it needs to focus on being a good retailer first. That is a full-time job. NatWest has had 300 years and has still not got banking right. It would be a great shame if Tesco lost sight of its strengths as a retailer in a bid to avoid the weaknesses of the banker.
The slimline Lord Lawson of Blaby is becoming quite the TV personality. The former Chancellor of the Exchequer, then cruelly nicknamed the Fat Controller, successfully worked the chat show round when promoting his book setting out how he shed so many pounds. Now he is appearing in a TV advertisement extolling the virtues of personal equity plans (PEPs), which can save you many pounds.
It was Lawson who launched the PEP on an unsuspecting world a decade ago, so perhaps it is only right and proper that he is again associated with this popular tax shelter.
But wait a minute. Is not Lawson advertising PEPs on behalf of M&G? Is not M&G a rival of Barclays in the PEPs field? Is not Lawson a director of Barclays? Yes, yes and yes. The question then is whether this direct promotion of a rival is unbecoming of a main board director. Barclays chairman Andrew Buxton is said to be a little peeved. He should be hopping mad. If Lawson will not drop his work for M&G, perhaps Barclays should consider dropping Lawson.Reuse content