View from City Road: Winning the day at Amstrad

BARRING last-minute surprises, a historic victory for ordinary shareholders is likely at Amstrad. What began as a simple grassroots rebellion by small shareholders grew into one of the most remarkable demonstrations of shareholder power in recent times. All the more so because it was small investors - many of whom were Alan Sugar's fans - who led the campaign to reject his 30p-a-share buyout proposal.

The proposal was little more than an attempt to buy out Amstrad on the cheap. It relied too much on the street trader's methods to win approval rather than a proper and independent scrutiny to which shareholders were entitled. Unfortunately for Mr Sugar, his shareholders were not quite the mugs he probably assumed them to be. Kleinwort Benson and Touche Ross should have known better than to let through as insubstantial a document as the one they put their names to.

Having rejected the terms, however, shareholders are unlikely to see any early benefit. They will have to be patient.

In the Seventies and Eighties Mr Sugar changed people's lives by cutting prices on personal computers so far that they could afford to take them home. But this strategy is no longer sufficient for the Nineties and beyond. Now his company needs a strong team of professional managers able to develop a new approach, based on lucrative niche markets, and non-executive directors capable of standing up to Mr Sugar.

Happily, Amstrad has already begun that process with a search for two outsiders for its board. Strengthened management is needed not only to develop a clear strategy for the future but also to protect shareholders in case Mr Sugar does sell his stake.