There is a lot of
hand-wringing in the UK about what to do to stem the complete sell-out of British Industry. In a week when the state-owned
Deutsche Bahn was allowed to take over
Arriva this subject has a special relevance. Apart from the absurd situation that a posse of
'Sovereign Wealth Funds' and nationalised industries are already controlling a substantial part of British Industry, the lack of leadership among the political circles can only astound. The main
rule maker in matters concerning takeovers, the innocently named
'Takeover Panel', is basically a club that is dominated by the interests of the Merger and Acquisitions Industry. Their representatives round-trip regularly between lucrative jobs in the M+A business and even more lucrative jobs in the same industry after they served two years making sure that the M+A
bandwagon runs smoothly and the flood of related 'advisory' fees does not dry up and thus threaten their Christmas bonuses. We have repeatedly pointed out that the rules of the M+A game are stacked against the long-term investor (in both the buying and selling shareholder camp given the fact that more mergers destroy value than create 'value', even in the light of the fact that the -
usually negative - ''value' loaded on employees and the taxpayers is usually excluded from any evaluation of mergers). Last not least the fact that even representatives of established institutional investment firms publicly proclaim on business TV that they make the real money only when a company gets 'taken out' (sic) speaks volumes about the culture - or lack thereof - that predominates among the
fiduciaries that are responsible for the investments of the ordinary citizen. We do not even want to mention the attitudes inside the 'hedge' fund community where the word
greed is the only fit description for their management culture.