FRIDAY 26TH NOVEMBER: Bank of Scotland Up the Ante

Bank of Scotland announces this morning that they are increasing their offer to 1.75 BoS shares, plus £1.90 in Loan Notes per NatWest share. This is a fairly substantial increase of around £1.70 a share and is now worth about £15.40 per share based on their current share price, as that is obviously still the main determinant of the bid value. Plus there will be a special dividend of around £1.20 per share once the businesses they intend to sell have gone. However, BoS shares immediately drop on the news by about £1, making the bid worth less. Nat West shares go up to £15.50, the highest they have been.

I think all this means the market feels we are getting close to an acceptable price, but the BoS decline might also indicate some nervousness about either the amount they are paying, or the ongoing performance if they do succeed. At what point will the market feel they are overpaying and mark them down in the same way we suffered with the L&G bid? However, there must be some pressure at these levels for our Directors to accept the offer, although everyone still expects RBS to come in soon; and possibly others.

Late morning, I go back to the (two-day) purchasing conference, and meet Niraj, an old colleague of mine from Mars days. He is presenting on his global sourcing strategy at Danone, where he is now Purchasing Director. Also meet two ex-NatWesters, both of whom I've heard a lot about. Mike is now number two in Barclays purchasing. He used to run IT purchasing at NW and has a reputation as a very hard, tough manager and negotiator. He now seems very relaxed and humorous to me and we have an enjoyable lunch together; he has kids now, which he didn't when he was at NW, so perhaps he's mellowed.

Marina left NW not long before I joined so I have never met her either until today. She is now European Head of non- manufacturing purchasing at Dell Computers, and is an impressive young lady. (I don't mean she is 22 or anything, but unfortunately more and more people I meet on business look "young" to me! Anyway, I guess Marina is early 30's.) I suspect she

was too ambitious to hang around at NatWest for too long. She comes over as

someone who is already doing well but will go much further.

Go back to the office late afternoon for a meeting with Jim and the MD

of ICL, about various outsourcing possibilities. We had some varied experiences with ICL back in my Department of Social Security days (although being a supplier to the DSS had its challenges!) but I've been impressed by the work they have done for NW recently.