ALMOST a week of deliberation by the Takeover Panel into therival merits of bids for Hyder by Western Power Distribution andNomura have left us none the wiser. WPD, which was ahead in the racebefore the panel intervened, has emerged as the eventual winner.
Investors in its Welsh target are no doubt smiling at the resultwhich, at 365p per share, gives them a hefty return on shares thatwere going nowhere under their own steam.
But they, and the rest of us, have reasonable questions to askthe panel. The most obvious is: why did it interfere in the normalworkings of the market? Sure, the takeover battle had turned into avery public poker game, but the hardball tactics of bid, make themsweat, then counterbid hardly damaged shareholders. There were onlytwo players in the game so it was actually fairly easy to keepabreast of the action.
In announcing that it wanted sealed bids by last Friday, theTakeover Panel said it wanted to "provide an orderly framework" forthe end game. Instead chaos loomed over the weekend. While it wasfrustrating for Hyder shareholders, the wait which dragged on intothe middle of last week must have been agony for the utility'sworkforce.
So, once again we find ourselves questioning the City regulation.We never seem to get it right. When we leave it to the my-word-is-my-bond patricians we end up with the mayhem of a Barings collapseor Peter Young scandal. The backlash and recriminations lead to thearrival of the Financial Services Authority and a stifling signing-in-triplicate bureaucracy.
And at a time of massive shake-out in European and global equitymarkets emerging fast, the Hyder affair has done the financialindustry no favours and left London looking foolish in the eyes ofthe world.
As globalisation accelerates, merger and acquisition activitywill hot up and for the good of many jobs in Scotland, if nothingelse, it's vital that the City of London remains in the thick of theaction and demonstrates it is able to handle bigger and morecomplicated deals. The last week cannot have filled many withconfidence.
A global opportunity
In Scotland, we can have more confidence about our own chances inthe wider global economy. On Page 7 we publish an edited version ofa paper by senior World Bank official Gerry Rice, who has justreturned to Washington after a year back in his native Scotland.
The outsider's perspective is always a useful yardstick by whichto measure our progress and Rice concludes that we have a hugeopportunity. He says our size should be ideal to allow us to keepchanging tack swiftly enough to exploit the ever changing winds of e-commerce.
However, he throws down several challenges, and suggests thatthere is not actually much time for debate. We need to get wired ina major way, we need to get out more in the world, we need toexploit our brainpower more effectively using the internet and,above all, we need to reinvent the way we educate our children - andensure they stay learning as they grow older. Action needs to betaken on key fronts to prevent the likes of Spain, Portugal, Greeceand Poland overtaking us.
It would have been inconceivable 15 years ago to be worryingabout these nations as rivals. We would have characterised them aspoor, backward, technologically limited and practically Third World.
Ironically, it is their previous lack of sophistication that nowgives them strength. Because they do not have old-styleinfrastructures, there is nothing to be updated. They can simplystart from scratch with the best new technology available.
It's scary and exciting all in one.
rmain@scotlandonsunday.com
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