Wednesday 9th February 2000; RBS Looks Good...and So Do the Fish and Chips
"RBS looks poised for victory", is the headline greeting me in The Times this morning. Both Mercury Asset Management and Schroders have opted to back the Royal Bank. Together they hold around 8% of the shares, so this is highly significant. Yesterday RBS stated they have received support from over 12% of the shareholders, so they now have around 20%.
Bank of Scotland are upset that RBS announced this, and have asked the Takeover Panel to investigate; they claim RBS are "desperate" and are in breach of the rules. It looks like RBS are trying to get the all-important momentum behind their bid. However, and despite the clarity of their headline, The Times thinks there could yet be a split decision, with neither bidder achieveing 50%, while the Commentary column still thinks we deserve to survive.
Despite this vote of confidence, NatWest looks doomed. After some weeks or even months when the position looked quite closely balanced, the last couple of days things seem to have rapidly moved against us. The press comment has become more consistent, and has generally (but by no means absolutely) come out against us remaining independent. Although we have fought a good fight, better than initially expected, we should not be forgiven for past failures and indiscretions; this seems to be the feeling.
Perhaps surprisingly, most of the papers have come down in favour of BoS. They have a clearer and greater focus on pure banking, which is seen as what NW needs. RBS are more diversified and have hence may have too many distractions. BoS also arguably have more "qualified" managers ready to parachute into NW; and they deserve some credit for having the guts to start the whole process off by making the first move.
However, the majority of the shareholders are favouring RBS. The logic here is that there is more synergy, both in terms of cost cutting opportunities (such as branch closures) and for increasing sales. There is also some enthusiasm for this being a step on the way to creating a European mega-financial services company, given RBS already have cross shareholdings or close contacts with Spanish, French and Italian banks, and the CGU insurance company.
I go up to Cheadle to see the now almost empty warehouse. It is very strange, particularly the area where we used to have two huge envelope manufacturing machines; now sold and gone. I have mixed feelings as I wander round the silent building. It is sad in some ways to see the end of what was a bustling operation only a few weeks ago, and I feel an element of guilt about the redundancies, although I believe most of the staff have now found jobs elsewhere.
But I am also quite proud in that we did something that was difficult to manage but was absolutely the right thing to do for the company. I wonder if I would feel the same if I was a Chief Executive announcing 15000 job cuts? I suppose the principle is the same.
I do the centre manager's annual performance review, which is pretty good. He did well to keep the service to the branches in terms of stationery and print supply going up to the end. That was not easy with a bunch of staff who could not be expected to be highly motivated given the circumstances. Then we go out for lunch- to the Dolphin fish and chip restaurant in Reddish. Reddish is a place I have never heard of, and would have guessed to be a Monty Python invention. Being a Northerner, and a teenage Python fan, I actually thought for many years that Neasden was a figment of John Cleese's imagination. I was quite shocked when I finally moved south and found it was real.
We have the Cod Special with mushy peas, bread and butter and tea. It is outstanding, and my business expenses for lunch for two are the grand total of £9.50. This is the joint best fish and chips ever, alongside a place in Seahouses on the Northumberland coast, which was so basic I had to drag Jane in physically. We were then served fresh and succulent cod that bore no resemblance whatsoever to what we usually have from local Berkshire chippies. but the Dolphin is up to that standard.