All but four vote for Warburg sale

Shareholders gathered yesterday to approve the purchase of S G Warburg, Britain's premier investment bank, by Swiss Bank Corporation for pounds 860m. Chairman Sir David Scholey spoke to the gathering in a manner suggesting the procedure was purely a matter of course.

A sea of grey suits fuelled an atmosphere more akin to a wake than a knockdown sale. The entire board sat in tiered rows behind their chairman and shifted uncomfortably when questions began.

A former senior director of Warburg's, Mr Peter Harley, posed the only potentially awkward question. He said there was a great deal to be proud of in Warburg's but concluded that had the bank not entered into ill-conceived expansion and incurred unjustified costs, there would have been no pre- tax loss of pounds 16.9m and no need for the sale to SBC in the first place.

Mr Harley wanted to know how the board could be happy with the sale of the banking operation for a premium of less than that paid for some other parts of the group. He asked if members of the board did not think they could put the bank back on its feet themselves?

Sir David replied that only radical and wrenching surgery would bring the banking division back into profit. Sir David repeated several times that the board unanimously recommended the sale.

A half-hearted question was put about a special payment to Mercury Asset Management of pounds 35m as a contribution towards covering its costs from the separation of the business from the group. The meeting was told that such payment was necessary to cover the cost of renaming MAM's overseas business and for the replacement of facilitates currently shared with Warburg's.

Nobody mentioned the axed merger plans with Morgan Stanley. When Sir David called shareholders to vote in favour of the resolution, a sea of hands eclipsed the view of those standing at the back.

When he called a second time for the vote of those against the sale, only three tentative hands were raised, belatedly joined by a fourth.