Magazine article The Spectator

A Whiff of Crackling

Magazine article The Spectator

A Whiff of Crackling

Article excerpt

SOMEONE in the Stock Exchange's slabby tower must remember what happened when the Peninsular and Oriental Steam Navigation Company bid for Bovis the builders. P & O had run out of steam and was navigating in circles, Bovis's management was much hyped or much admired, sleek merchant bankers tried to put the two together. Bovis's shareholders lapped up the deal, P & O's resisted it. Stickers spread across the City: `Save P & O - tell Bovis No!' In the end, P & O's shareholders threw the deal out and Bovis proved to have needed it more. The lesson was and is that to buy a company for its management is like burning down a house to roast a pig. Managers, however expensive, are cheaper than companies. The Exchange's attempt to merge with its opposite number in Frankfurt conjures up a whiff of crackling from those distant days. …

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