Britain's assets are slowly being nationalised but not by us

[TrueBlueTerrier]

Britain's assets are slowly being nationalised, unfortunately not by us

http://www.guardian.co.uk/business/2010 ... over-rules" onclick="window.open(this.href);return false;

It is not necessary to be a raving protectionist to feel a sense of absurdity at the takeover of bus and train operator Arriva by German state-owned train company Deutsche Bahn. The UK's mania for privatisation of industries such as rail, nuclear and utilities has led to important British assets being nationalised by a foreign government. EDF, a French state company, owns nuclear power group British Energy, along with several local electricity franchises; the Dutch state railway owns chunks of our network, German state telecoms company Deutsche Telekom bought T-Mobile in the UK and Deutsche Post has a licence to deliver letters here. Then there are the sovereign wealth funds controlled by foreign governments, which bought chunks of Barclays Bank, P&O's ports and Manchester City football club.

This may not be a terrible thing. It may even be a good thing – the French government will probably do a better job of running nuclear power than ours. But these takeovers are too important to be waved through - and the situation is asymmetric. We did not use our North Sea oil revenues to create a sovereign wealth fund of our own; state-owned British firms are not on shopping sprees, and our open door policy towards bids is not replicated in Paris, Berlin, or even Washington DC.

I have been arguing for several years that there needs to be a public debate on foreign takeovers – a lonely view until US company Kraft's takeover of British chocolate-maker Cadbury brought the issue centre stage.

Support is gathering for a tightening of takeover rules. The Tories are quiet on the subject but Labour and the Liberal Democrats want to lock short-term investors out of the voting, so firms cannot be bought and sold at the behest of hedge funds. The Lib Dems want to subject takeovers to a public interest test on whether a deal would serve the UK economy. Even bosses' club the Institute of Directors has joined in, backing Labour's manifesto proposal to introduce a "Cadbury rule" so hostile takeovers can only go through on a "super-majority" of two thirds of shareholders in the target. The captains of industry actually go further, and say the higher threshold should apply to the bidder as well.

A major motivator for takeovers is the rewards they decant into boardrooms, legal firms, investment banks and PR advisers. The incentives in the top ranks of a target company are stacked towards succumbing to a hostile bidder, after racking up the price. In the case of Kraft, "winner" Irene Rosenfeld had a 40% pay rise to £17m last year, but "loser" Todd Stitzer, the former Cadbury chief executive, walked away with £40m in cash, shares and pension. The hedge funds just want a quick return and even "long-term" shareholders often prefer to cash out at a profit to boost their quarterly performance figures.

It is not an environment conducive to the welfare of employees or pension fund members, or to the long-term interests of the UK.

[heapsy]

Britain's assets are slowly being nationalised, unfortunately not by us

http://www.guardian.co.uk/business/2010 ... over-rules" onclick="window.open(this.href);return false;

It is not necessary to be a raving protectionist to feel a sense of absurdity at the takeover of bus and train operator Arriva by German state-owned train company Deutsche Bahn. The UK's mania for privatisation of industries such as rail, nuclear and utilities has led to important British assets being nationalised by a foreign government. EDF, a French state company, owns nuclear power group British Energy, along with several local electricity franchises; the Dutch state railway owns chunks of our network, German state telecoms company Deutsche Telekom bought T-Mobile in the UK and Deutsche Post has a licence to deliver letters here. Then there are the sovereign wealth funds controlled by foreign governments, which bought chunks of Barclays Bank, P&O's ports and Manchester City football club.

This may not be a terrible thing. It may even be a good thing – the French government will probably do a better job of running nuclear power than ours. But these takeovers are too important to be waved through - and the situation is asymmetric. We did not use our North Sea oil revenues to create a sovereign wealth fund of our own; state-owned British firms are not on shopping sprees, and our open door policy towards bids is not replicated in Paris, Berlin, or even Washington DC.

I have been arguing for several years that there needs to be a public debate on foreign takeovers – a lonely view until US company Kraft's takeover of British chocolate-maker Cadbury brought the issue centre stage.

Support is gathering for a tightening of takeover rules. The Tories are quiet on the subject but Labour and the Liberal Democrats want to lock short-term investors out of the voting, so firms cannot be bought and sold at the behest of hedge funds. The Lib Dems want to subject takeovers to a public interest test on whether a deal would serve the UK economy. Even bosses' club the Institute of Directors has joined in, backing Labour's manifesto proposal to introduce a "Cadbury rule" so hostile takeovers can only go through on a "super-majority" of two thirds of shareholders in the target. The captains of industry actually go further, and say the higher threshold should apply to the bidder as well.

A major motivator for takeovers is the rewards they decant into boardrooms, legal firms, investment banks and PR advisers. The incentives in the top ranks of a target company are stacked towards succumbing to a hostile bidder, after racking up the price. In the case of Kraft, "winner" Irene Rosenfeld had a 40% pay rise to £17m last year, but "loser" Todd Stitzer, the former Cadbury chief executive, walked away with £40m in cash, shares and pension. The hedge funds just want a quick return and even "long-term" shareholders often prefer to cash out at a profit to boost their quarterly performance figures.

It is not an environment conducive to the welfare of employees or pension fund members, or to the long-term interests of the UK.

A First Class (sorry could resist) post TBT. The problem is that such a move would be about 30 years too late. Look back in time and British companies have long been the target of foreign take-overs. Rolls Royce being a prime example.The big problem is and always has been that polititians in this country only think about one thing, thats making a quick buck!
We have bought and sold not only our companies, but the very people who have worked for them, down the river. We have never put constraints on protection of jobs and employment terms or anything of the sort and we SHOULD have. Look at the inventions that have been created in this country. 90 percent of everything ever invented was created here. Not once has the British government backed the inventors. Hence we see idea after idea cast aside, only for the likes of the USA, Japan or other such countries to develop and prosper as a result. Today we have enormous issues regarding pensions. Why have our governments not backed our inventors with cash, taking back what was borrowed, along with a dividend by way of a cut on every item sold, or a share in the company? This would have helped defend the state pension. The reason is exactly that which has created the mess we are in today. We lack the entrepreneurial savvy of our cousins from across the pond. Plain and simple. That is why many of our greatest inventors have left these shores for pastures new.

[adinnhall]

By they time they have sold everything there will be nothing left to govern, we will all belong to other nations. The man is supposed to be an economics genius! Selling assets in a depression does not bring the best price.

[lisacherry225]

It is not necessary to be a raving protectionist to feel a sense of absurdity at the takeover of bus and train operator Arriva by German state-owned train company Deutsche Bahn. The UK's mania for privatisation of industries such as rail, nuclear and utilities has led to important British assets being nationalised by a foreign government.