RUTH SUNDERLAND: A right old carry on at Rank

By Ruth Sunderland, Associate City Editor
Updated: 03:46 EDT, 1 July 2011

It is a long time since gaming group Rank acted as producer of the Carry On films, but it is now at the centre of a takeover farce quite as ridiculous as any of the plots graced by Sid James and Barbara Windsor.

The bid by Guoco, the Hong Kong vehicle of Malaysian billionaire Quek Leng Chan, turns all the usual choreography on its head.

In a normal deal, bidders offer a premium. Management and shareholders resist, either out of a genuine desire to remain independent, or more commonly because they are holding out for a higher price.

A carry on: Rank is now at the centre of a takeover farce quite as ridiculous as any of the plots that were graced by Sid James and Barbara Windsor (pictured)

In a normal deal, a bidder would not expect a large chunk of acceptances from investors at the first closing date, and usually, the top executives would cling onto their jobs until sacked, with a big payoff, by their new owner.

Clearly, though, this was not a normal deal. Guoco took its stake above the 29.9pc threshold that triggers a full bid, but offered the bare minimum of a premium so meagre it looked like an offer shareholders could only refuse. So it is a mystery why, at the first closing date, it found itself the proud owner of a 56pc stake.

Ian Burke, the chief executive, and Paddy Gallagher, the finance supremo, did not follow the script either – after a series of U-turns they fell on their swords.

In a fresh twist today, Guoco – thanks to a special dispensation from the Takeover Panel – backpedalled by extending the offer period so that investors can take back their acceptances.

The only plausible explanation for this bizarre episode is that Guoco never had any serious intention of making an outright offer, and expected other investors to live with it as a large shareholder.

Those other investors are blaming the takeover rules, though these were put in place to prevent people exerting effective control without having to go to the trouble and expense of making a full offer.

The Rank board, which seemed at a loss over how to respond, does not emerge with a huge amount of credit.

Nor does Guoco, which should not have taken its stake over the trigger level in the first place if it was unprepared to launch a full takeover. That suggests it either did not understand the rules here, or thought they could be gamed.
It is a new twist in the debate on foreign bids – the reluctant predator.

High stakes

António Horta-Osório is certainly taking a bold approach to reviving Lloyds Banking Group. The thousands of job losses, he believes, are absolutely necessary to bring it back into profit and get a return for the taxpayer. If he is right that they can be achieved without compromising customer service – which he has set public targets for improving – then there must have been frightening levels of duplication and inefficiency within the empire.

He is going out on a limb, unlike some rivals, to ease the flow of credit to small firms, and is next month writing personal letters to a million business customers reassuring them the bank is ‘open for business’.

There will be investment in shabby branches and a focus on winning ‘mass affluent’ customers and cross-selling them investment products from Scottish Widows, with the promise of as yet unspecified rewards for loyalty.

But he faces plenty of challenges, not least the toxic loans in the old HBOS portfolio and the risk that Lloyd’s stack of high loan-to-value lending will sour when interest rates rise. It is not worth getting excited about a payback for taxpayers, or the return of the dividend, for some time yet.

Nursing a grudge

Few would dispute that senior women in business have to deal with the odd bit of sexism at work.

But Kate Bleasdale, the former nurse who was dismissed from her recruitment consultancy Healthcare Locums, does seem unusually unfortunate.

She is suing at an employment tribunal, claiming she was unfairly dismissed, that she suffered sexual discrimination and was punished for blowing the whistle on irregularities.

It is not the first time Bleasdale has gone down this route.

She won £2.2m for sex discrimination in 2002 after she was sacked from a previous company.

Far be it from me to question the judgment of a businesswoman whose idea of fun is singing with an Abba tribute band while wearing a spectacularly unflattering silver catsuit.

But her turning to the tribunal again will only confirm the prejudices of those who still think women in the boardroom are more trouble than they are worth.