Failure of bulldog spirit
SHAREHOLDERS and employees in Cobham might have hoped that non-executive chairman Jamie Pike would have assessed all options before throwing board support behind the £4bn bid from private equity group Advent.
An independent view was particularly important given that chief executive David Lockwood has a history with Advent, having been at Laird just a year before it was sold to the same outfit.
As we report today, Lockwood and other executives could benefit handsomely from share options should Advent win approval.
It is extraordinary that Cobham and its advisers caved into Advent’s advances without fully exploring the views of the company’s biggest shareholder, Mayfairbased Silchester Investors, which holds a chunky 11.83pc of the stock.
Silchester questions why the management fell into the arms of Advent when there might be better value elsewhere. Indeed, the UK defence champion, which has only just repaired its balance sheet, has a good shot at prospering on its own and securing jobs in the South West.
Cobham chairman Pike has a history of
selling family silver. He was chairman of leading UK plastic packaging group RPC International when it was sold to Berry Global. He was chief executive of Foseco when it was taken over by Cookson.
Pike, like his naive namesake in Dad’s Army, showed no sign of offering the muscular resistance that investors and vulnerable staff in Cobham have expected.
Managing the board of a complex aerospace, maritime and defence operation in a volatile marketplace is hard.
But throwing in the towel should not be the easy option.
Meanwhile, the Boris Johnson-led Government needs to show that it genuinely backs our national security and innovation by scrutinising a contentious deal.
Bad sport
AMONG the reasons why Mike Ashley is such a fascinating figure are the burly shopkeeper’s capacity to surprise and his staunch support for the High Street.
But as last night’s car crash results show, he is now paying the price. Ambitions for House Of Fraser have been shattered and to compound his problems he is at war with the Belgians over alleged unpaid taxes. Given this ghastly background, the 6pc stumble in underlying profits might have been much worse.
What compounds Sports Direct’s problems is contempt for normal rules of governance and insouciance towards investors, staff and suppliers.
Initially Sports Direct was due to issue its delayed financial results first thing on Friday morning. Pesky financial journalists were warned they would not be able to ask questions. That became irrelevant when the presentation was cancelled and there were several delays in getting out numbers, which finally appeared after the London market had shut-up shop.
It can’t have been helpful that Ashley’s auditors have been involved in serial foulups, most recently at Patisserie Valerie.
Repeated postponements were painful for investors but more terrifying for staff.
After several zig-zags in days of uncertainty, one starts to wonder whether Ashley and his team are really fit and proper to be in charge of a quoted firm that has been on an unexplained spending spree using investor money.
The undisciplined market in Sports Direct shares should be a matter for regulators.
Bon voyage
RIGHT up until Mark Carney was persuaded by George Osborne to become Bank of England governor, the speculation was on an internal appointment, with deputy governor Paul Tucker hot favourite.
It should come as no surprise that former deputy governors Minouche Shafik and Andrew Bailey, and incumbents Jon Cunliffe and Ben Broadbent, are considered right for the job. Santander UK chairman and former Gordon Brown adviser Shriti Vadera is still mentioned.
A late runner, who has been interviewed, is Gerard Lyons. For many years he was chief economist at Standard Chartered before working as economic adviser to Boris Johnson as mayor of London.
No one should be beyond the reach of a determined Chancellor. If Sajid Javid were to be convinced that former IMF economist and governor of the Reserve Bank of India Raghuram Rajan is the best person for the job, he or a top aide should jet off to Chicago, promise free rein and persuade him to do it.