大象传媒

Why not just make it law that if you want to take over a business, you must have the assets to pay for it without borrowing?

That would remove the spectre of businesses being saddled with debts incurred by the purchaser in the process of buying it without interfering in the orderly give and take of the business world.

The words door and stable spring to mind. This would not be a cynical attempt to court electoral favour with those who don't realise that most of utility and infrastructure companies referred to have been sold off already would it? No surely not.

2 kevinhector wrote "most of utility and infrastructure companies referred to have been sold off already "
along with our gold, and our industry. Now we're just a nation of pen-pushers. (Sorry Robert, no disrespect intended.)

Interesting these new things 鈥渢akeovers鈥� when did they start? Was this about the time of sub-prime?

Usual great capacity to deal with current problems not shown by GuvUK!

This has been a major problem for more than 13 years, so the Tory鈥檚 deserve some stick too! But, with 13 years to have a crack at it, why now? Have they just found out that some companies may have borrowed the cash to become big? If so big order of the boot required!

We require a simple system where if you want to make a takeover of any British company, whether by a British company or foreign, you must prove the capacity to pay for it! An independent panel of experts, i.e. no politicos, agree that in ICT leverage of x is acceptable, in confectionary q, in banking y, in utility鈥檚 z, etc. If the company fall within that range the merger goes ahead, if not go away and work out another way, but go away! Then introduce a public serve test! But not at the whim of a politico! Some may think this will damage the British economy, no, merely slow down the rate of companies driving themselves into bankruptcy next year for this year鈥檚 bonuses! Make us uncompetitive, try buying a company in France or the US and see what hoops you have to jump through!

It would be cynical if it was Labour who had sold off all our utilities and Infrastructure companies.

More hot air , smoke and mirrors......all major industries have gone, their pensions schemes robbed and they now come up with this ???

As usual with our governments, much too little and far too late. Many companies cannot get funding for modernisation because the banks are tight fisted and the government loan guarantee schemes are toothless. There has not been a word in the National Press about Davy Engineering being sold off to another Indian conglomerate. If Davy are not strategic, I don't know a company that is. They provided the heavy engineering for the Thames Barrier and the Channel Tunnel, not mentioning the kit that produces armour plate for the military.

Allowing businesses to be bought with borrowed money is madness. I wonder how many of these takeovers were waved through by major shareholders like pension funds, ignoring the oppostion of smaller groups and individual shareholders. One shareholder= one vote would offer a more democratic solution.

The concept of borrowing to finance an aquisition is perfectly legitimate. Business is about risk management as is banking , therefore more and more state intervention is another nail into any possible competitive edge we might seek to exploit in running our businesses as the state just overly complicate things and bring the need for yet more non productive public servants.
A more sensible option is to have more stringent control of auditors, as often these are the people who allow misrepresentation of accountability and viability of business and allow takeovers and aquisitions to occur when the salient facts are more fiction than a J.K Rowling novel. It is often the case that the wool is firmly pulled over an auditors eyes in the interests of covering up discrepancies in accounting procedure. There needs to be a much tighter audit control to stop unscrupulous senior executives making false statements and this can only be done by auditers with teeth.
I have witnessed blatant falsification of figures to show business units in a good light to auditors and they were wholly fooled on both occasions. This is partly because all the top audit companies use wet behind the ears juniors but mostly because the process is just very basic and without real powers.

Good. Lesson learned, though, in my view it doesn't go far enough. No utility deemed essential should be in private hands - we could be held to ransom in a similar way to what the Greeks have experienced recently.

And just why does these rich folk need loans? If you can't afford it, you cant have it - means if you don't have the cash then save up harder and go without what you want until you have the cash. It's massive debt that has got the global economy into this mess, so the sooner we stop that, the better.

One little thing about takeovers: Mostly, in recent times, theses have been financed by borrowing from the banks. And then the taken-over company is itself burdened with debt to pay off its new owners initial borrowing and hey presto a free business to exploit. (I also note that the underwriting of the deals are also undertaken by the 'wonderful' British banks.)

Th UK is an unfortunately almost uniquely vulnerable position in this as we have the largest international banking system (outside the USA) that is quite happy to lend to any tom dick or harry to takeover assets in the UK that it understands and on which it feels it can itself mortgage and repossess, if required. This is yet one more of the great 'advantages' to the UK of being almost totally dependent on banking.

The proposals are far too late and will not be implemented anyway as if they were in the terms proposed it would 'harm' the UK banking industry to which both main parties are in hock up to their eyebrows.

I am not sure I can see a justification for raising the percentage needed for a takeover, but the blocking power for LBOs on utilities seems to make sense (and LBOs in general are a problem for the stability of the economy given easy access to credit, especially when the rates are as low as they have been at times in recent years). Adding a minimum period for holding shares before they can be used to vote with seems a reasonable idea, although not sure whether this is down to the government/regulator or should be something built into the rules of each company where appropriate.

"No situation so dire that Politicans cannot make it worse"
It is not the buying of UK Firms per se. It is the plundering, not the investing.
The remedy is in our own hands. Produce the 1st class and 1st rate engineers,scientists,administrators, yes even accountants (at least the ones that tell the truth) etc. The rest as they say "will follow naturally".
At least it would if our education system was not so bl...y awful.

Certain types of infrastructure companies probably do have a "national security" type of issue which does mean that any takeover should be looked at closely. However, that must not be turned into a "no foreigner" issue.

Most of British industry has already been surrendered by this Labour regime to overseas buyers. Claiming to make laws to stop foreign takeovers is I suspect a cynical attempt to curry favour with an electorate already appalled at the fact that so much of our industry is now foreign owned. I also suspect that such a law would be illegal in the EU and would be frowned upon by Labour's European masters.

Surely a bit late, is it not the case that there are only 2 electricity companies still within UK ownership? The rest are owned by German, French or Spanish government backed companies. In a decade or two they'll come back with the infrastructure in a poor state due to lack of investment just now.

At last, a recognition, by some present day politicians at least, that utility and infrastructure companies should not be left to be exploited for private gain. Their grandfathers knew this, particularly the Business Secretary's grandfather, Herbert Morrison. That is why they were in public ownership before they were flogged off as part of the "family silver". Even a former Tory Prime Minister knew that this was wrong.

So there will be a "public interest test" to see if a new potential owner's plans are suitable, but what if the present owner's plans are not suitable? Surely, if a potential owner's plans need to be tested, then it must be just as important to test the present owner's plans. There is no reason why a current owner should necessarily be better than a new owner.

A private owner's main priority is profit. Giving users a good cheap service is secondary and only seriously considered when the user could switch to a competitor's service, if not satisfied. Genuinely independent alternative infrastructure and utility services are often just not available, so the user is over a barrel.

#1 Megan wrote: "Why not just make it law that if you want to take over a business, you must have the assets to pay for it without borrowing?"
This to me is one of those 'nice sounding' things that could get lots of popular support - because it 'sounds' good but is not really such a good idea. Let me explain my thinking on this - Ask the questions : "What's the big problem ? - and "Will this 'solution' help or will it make the problem worse ?" The big problem is that we are in massive debt to the Chinese. They do Uni-Trade with the West and sell to us without buying from us. Normally this will lead to a devaluation of sterling as they have no demand for Sterling as they don't want to buy our goods and services, this will eventually mean that our goods are so cheap they are worth buying and then we will be back to balanced trade - this is standard International Trade theory. But what the Chinese do to fiddle
the situation is they use the Sterling we give when we buy their goods, to buy British Shares, Bonds, Business, Land... anything but our 'stuff'. So while we become a nation of unemployed borrowers, as we can't compete due to our exchange rate being artificially too high, we become more and more owned by the Chinese (the interest we pay to China on our debts to them is getting close to the size of our defence budget). The Chinese can afford to pay for our companies so you idea to use this as a limitation technique won't work much. I suggest what we need is for China to be taken to the WTO and fined something like 拢20 Trillion payable to her Uni-trading' victims (the rest the World mostly) for this unfair trading practice.
This amount will solve our current financial crisis and we can prevent further such problems by having freedom of trade in goods but restrict 'freedom of movement of capital' - which is what buying shares instead of goods mostly amounts to, along with using NEFS - Net Export Financial Simulation.
Remember that much of the credit bubble that blew up into the Credit Crunch was fuelled by the Chinese. First cheap competition from China would close down a factory in some small town in the USA, the money the Chinese received was used to re-invest in the property market of those unemployed workers, who could take Chinese loans out to buy yet more Chinese goods.

Cadbury's law - Ha Ha Ha - That's a good one!

We need a law for Dodo Brown 'cos he's a fruit and nutcase!

Ha Ha Ha!

2. At 3:59pm on 11 Apr 2010, kevinhector wrote:

The words door and stable spring to mind. This would not be a cynical attempt to court electoral favour with those who don't realise that most of utility and infrastructure companies referred to have been sold off already would it? No surely not.

You must remind us who privatised the utilities.

Governments - if you think the problems we create are bad just wait until you see our solutions.

A law without teeth if you're honest. How many "utilities" are still fully or even partially Britih owned? This is just more spin from the great spin doctors. Unless and until British companies receive real support from whatever government we are headedback to the days when the purchase of Jumbo jets (747s) caused a major balance of payments deficit. China has problems due o increasing cost of imported raw materials. This country still has reserves of coal, copper ore, iron ore etc. which have lain ignored or been sold to foreign investors. Time to forget banks Robert and look at what your own home town and hundreds like it have lost in the last forty years.

Back to the 'old labour" principals? Mind you that might not be a bad thing for the country.... discuss


Next question, what happens when the Spanish run out of money? Who then pays for them?
Time for the UK ingenuity to now start to produce cash to pay off debt..

A Frenchman rang me up today and asked me if I was going to vote for the Labour Party. He claimed to be from the Labour Party. Has anybody else had that experience?

If he was from the Labour Party, then does that mean that they can't get any Brits to do it?

Would he be being funded by a French organisation because the Labour Party is in financial difficulties?

I vote UKIP.

'Carr also said there was a case for disenfranchsing short-term speculators during a takeover battle, such that they would be unable to influence the outcome.'

Roger Carr had plenty of opportunity to put forward to the Cadbury shareholders wether there should be a ruling against possible carpet baggers, (like the rules implemented by building societies on having to hold a new account for more than a year before being allowed to vote) he didn't.

Perhaps he didn't do it because it would have stopped the share price rising so much in the final months of the takeover battle (when the carpet baggers made most of their gains) and so his subsequent payoff would have been reduced ?

This prospective law like a lot of the legislation passed by this government will be ill-thought out and badly implemented and will be bypassed and overturned by the EU and WTO.

It's just another sound bite policy, big on spin and without any substance, I'm just surprised that the other two parties haven't embraced it as well.

This comment was removed because the moderators found it broke the house rules. Explain.

Nice idea but about 20 years too late ... and conveniently brought up during an election campaign rather than whenthe real work is being done in parliament. Laughable..

This comment was removed because the moderators found it broke the house rules. Explain.

Why is this country so keen to sell everything that is British. Do we actually own anything anymore? Maggie started it and Labour are going to finish it.

Generally sounds like a good idea to put some additional limitations on the immorality of private capital - it might help prevent some of the worst examples of corporate takeovers.

Also good politics - I can't imagine the Tories ever suggesting this as they are too 'in bed' with big business.

This is not just about big business, the failing of small businesses means that the defence and aerospace industries cannot find engineers, the IT and telecomms industry, the high tech growth industries, have nobody to feed them qualified staff.

You do not walk into a high paying job with a good company, you do not move up from junior to senior, you move between companies and this is the great fault line in the UK.

When you rely on another country for your basic needs, you will lose control of your higher level needs.

Cadbury employ very few people, only processing chocolate in the UK, the packaging is already overseas, so they have few feeder industries, the shame for the UK was the loss of engineering, where there was the ability of any worker to calculate faster in their head than anyone can press the buttons on a calculator.

I've never understood why when someone borrows money to buy a company that becomes the company's debt.

Surely the purchaser is the borrower and should be liable for it, not the company he's bought.

If I take out a loan to buy a car it isn't the car that has to pay it back.

32 Betty_Swallocks

When you take out a mortgage it is secured against the property that you do not own yet. You have promised to make the payments but it is the house that is the collateral for the loan.

It is the same with a leveraged takeover, the purchaser is promising to make the payments according to the business plan for the company and the debt is secured against the value of the company.

If the purchaser fails to maintain payments the company is "Seized" in the same way your house would be reposessed.


The debt is attached to the company or the entity that is the company whether a plc or privately held.

25 BoBRocket

The CEO of any plc has one duty in law; to achieve best value for the shareholders whether by dividend return or capital growth (Share price).

As long as this is defined only by monetary means then whether or not it is good for the country or those shareholders future investments is neither here nor there.

So his actions in the Cadbury case were entirely driven by his fudciary duty.

There is something very attractive in this idea, there has to be some way of preventing companies being taken over just to close them down and remove them from the market. Company growth by virtue of a good product, not because they happen to have a lot of money with which to eliminate competition. There have been far too many examples of that in the last twenty years. Making money cannot be the one and only criteria in life, specially when it means good efficient factories closing for no good reason. Read Breweries and Commercial Vehicles as just two close to my interest.

Putting some limit of debt leverage may be suitable for certain key infrastructure or national strategic business. But after 13 years and this government's desperate plead to get French Nuclear power etc, it seems a last minute conversion. The most important thing is we need to encourage more investment from overseas to grow our industrial base. Interesting to see while complaining about banks, this government has allowed NHS managers increase of over 100% on salary in 10 years compared to 40% or less for Nurses and we have been employing foreign doctors with lack of English skills. No wonder the wealth gap has increased in last 13 years

Governments do need to be wise and on their guard.

We have a major unemployment problem here in the UK because other countries "exported" their unemployed to us displacing British workers and the government has nothing in place to prevent it.

Similarly,New Labour makes a big fuss about National Security, ID Cards etc but any foreign power can simply buy British utilities and companies because again there are no laws to stop them.

It's more than about time that our country got its act together and put in place the same laws that everyone else is using to protect their interests.

It's also the case that, rather than invest their monies in any political party, unions would do well to invest monies in British companies so that as shareholders they can protect their jobs and control the earnings and behaviour of those at the top who would act purely in their own interests, sacking honest, loyal workers in the process.

We have a government and a country up for sale and it's time as a country that we started to take control once again.

Re 36, after the Labour government forced the sale of Westinghouse, despite many experts saying we were going to need nuclear power, we are now in the position of having to buy back that technology again to build the new generating capacity. Well done Gordon. I understand he did the same trick with our gold.

Talk about trying to bolt the stable door after the horse has bolted.

The horse in this case has run across the fields, swum the channel, built a new stable overseas, had a long an happy life and passed on since it first left the stable.

This would have been a useful protection to put in place before the mass privatisations of our infrastructure and utilties firms. Now it is just another piece of gesture politics come election time.

Couldn't agree more with Peter Fox about auditors.However, business is about producing a product or service that can be taken to market,sold and a profit made.Business is not about risk management. Peter says" business is about risk management as is banking"!Well look at the mess that has got us in.Forget risk management get back to sound financial business practice.

Mr Peston: 'The final decision would be for the Business Secretary'

And who is the business secretary? and was he elected?

You should not pay peoples salaries on borrowed money i.e. want to take over a company? Then you must have hard cash to pay for it.

One of the big problems with many takeovers that use large amounts of debt (especially those involving football clubs) is that the buyer borrows money initially but, once the company has been bought, transfers the debt to the target company. As a result, many companies, like football clubs, end up with highly leveraged balance sheets -- not as a result of borrowing money for the purpose of their business but because they were bought by someone who, basically, could not afford to buy them with his own money (or with money borrowed on the security of his own assets). The target business then has to manage this debt for many years to come, and this will often result in redundancies and disposals that otherwise would not have been necessary. Only a few years ago this would have been against the law in the UK (because of the law against "financial assistance"). It still is in many other countries. Time for a re-think?

#34 moncursouthernreiver

I appreciate what you are saying and at the time of the takeover I can see that Roger Carr was under an obligation to recommend the offer to the shareholders, however, 'best value' is not only measured purely in financial terms.

Firstly, if we do want to measure it purely in financial terms, yes the headline share price paid is raised but some of the shareholders will incur costs associated with having to find new investments (time, fees etc.) which reduces the nett benefit of the takeover. I imagine it is only the headline offer which drives the recommendation from the board and not any other consideration.

Secondly, as a shareholder I might have invested in a particular company not for the immediate return but because it is a solid (stolid even) company that is reasonably well managed and is committed to progress over the longer term, one that I know is going to still be there in 20, 30 or even 40 years.
This knowledge gives me peace of mind in my investment (which has a value of its own)

We all invest for different reasons, some to make short term gains, some because they believe in the philosophy of the company. When a hostile takeover rears its head, those investors with the short term goals move in and swamp the longer term investors, driving up the price that the new owners would have to pay.
The directors as you say have an obligation to reflect the 'current' shareholders interests.

The directors of a company are free to suggest to shareholders with a more long term view that they might want to protect themselves and their company from such takeover action by restricting voting rights to shares that have been owned for a given period or longer.

I imagine that when first implemented a share price might drop, however if a majority want that in the longer term interest of investing in a stable company that is not having to shell out large sums of shareholders money to fend off hostile takeovers then that is what the directors must do.


I agree that once we got into takeover territory 'his actions in the Cadbury case were entirely driven by his fudciary duty.', my point is that he had plenty of time before then to suggest ways to mitigate against such a scenario, to suggest them afterwards is a bit lame.

#18 Glenis,

Yes, those pesky Chinese manipulating their currency.

Won't catch us doing that!!!!

Alistair Darling in this first interview as Chancellor told the FT that he didn't believe in economic patriotism and he and his wee chum Gordon have been proving it for the last thirteen years.

Re 18 & 45, well the Chinese and any other nation doing the same thing, should never have been allowed in the WTO with "fixed" exchange rates. It is hardly "free trade" when the currency is manipulated. But who is bold enough to call a spade a spade and say, okay there is a 20% import tax on Chinese goods until the currency is "free". Or, a reciprocal arrangement to say within 20% of the total trade between 2 countries. Would it get the Chinese buying our products, I don't think so, but it would stop them exporting and making the rest of the world pay for their development. And we are still giving them grants for this and that, our leaders are off their heads!

Lots of fuss about an old problem. I have ceased to work because I refuse to pay taxes to go to illegal wars. I do not get state benifit because I have to much saving.

Now looking at the 'problems' I have seen over my lifetime this problem is not new. My first job after school was for a famous swiss confectionary maker, my next was for an American oil exploration company. In fact on thinking about it I have only ever worked for two british companies, which incidently were the worst run businesses I ever worked for.

The problem as I see it is not a Chinese currency manipulation problem, after all they only peg it to the dollar like many other countries. No, the problem here and indeed for most western countries is the total lack of a long term plan. On a personal level I made a 50 year plan 40 odd years ago and whilst I have had to modify it I have basically stuck to it. All governments appear to have a plan for no more than the next term and even then they are not thought through. I would vote for any party that even had the intention of constructing a long term integrated UK plan, say where do want to be in 100 years and work it backwards to where then do we need to be in 25 yesrs, 10 years and 3 years. I do not see any such planning from any party.

Maybe the Government are thinking about making the Labour Party a utility?

It's probably their only chance!

Well it does make some sense putting a lock on the stable door after the horse has been stolen as one day we might be able to afford another horse or, as is more likely in our case, a donkey.

As a taxpayer I paid for the horse. My wife chooses to support a donkey sanctuary. She gets more pleasure from the donkeys than I do from paying the taxes.

1. At 3:57pm on 11 Apr 2010, Megan wrote:

"Why not just make it law that if you want to take over a business, you must have the assets to pay for it without borrowing?"

Megan, that is an excellent idea, simple and effective - now try and get it past your 'bought' representative (MP) who is in the pocket of the banking system who would all be out of pocket if you implemented this.

In order to achieve this sensible idea we need to pull down the entire world of finance and the corrupt legislator who runs this country.

33. At 05:39am on 12 Apr 2010, moncursouthernreiver wrote:

One thing you have omitted in your explanation is that although a mortgage is secured againt an asset (house) - the homeowner is still personally liable for the debt

This means if you get reposessed while in negative equity you will still be chased for the money due through the courts.

However I believe that limited companies - and umbrella companies which are involved in takeovers do not have such a burden.

This is a big factor when determining the risk of purchase. I mean how many of us would be much calmer at the moment knowing that if we lose our jobs we can simply 'walk away' from the debt knowing there will be no comeback?

52. At 11:07am on 12 Apr 2010, writingsonthewall:

True WOTW and I point I had overlooked when running this through in my own mind, the situation is not quite the same as a householders mortgage. However, I am led to believe that in the US this is not the case, they can simply hand the keys back and walk away, no debt? (or is this another myth).

53. At 11:26am on 12 Apr 2010, Uphios

No you are 100% correct - which is why there is a new phenomenon of defaults sweeping across America right now.

Where people have bought Alt-A mortgages (the ones that work like an HP agreement - very low introductory payments followed by a massive hike to make up lost ground) - as they reach the turning point they do some simple maths and realise that they are 'better off' walking away from the property (and then the negative equity is the banks problem).

As the cost of borrowing (for the consumer) has remained stubbornly high (only the banks get to borrow at low rates) - the cost of renting is cheaper in the US than buying currently.

They call it 'strategic defaults' and they are the next 'Economic wave / storm' Gordon (or whoever after May) will be blaming for all our woes - like "sub-prime part deux - the return of the prime".

...but of course none of this is being reported - simply because it's not deemed newsworthy (I mean when did predicting a crisis ever become newsworthy - best to pick over the bones of the last crisis we missed instead!)

This strategic default has also had a very interesting affect on the retail world. Many homeowners have already mentally decided on default (they haven't told the banks yet) - and they have stopped paying their mortgage - and consequently have 'spare cash' which they have used to go on a 'consumer spending boom' - which the monkeys in the Fed have mis-diagnosed as a 'sign of recovery'!

I don't know if it will prove to be a better system or not - but the good thing is that the constitution ensures the law cannot be used to chase outstanding debt on a property (unlike here) and that the banks do take the pain of their poor lending practices (unlike here) - which should provide an incentive not to lend too laxly (but that didn't work in either case).

#43 Being a lawyer of many years I never saw the law on financial assistance never stopping a takeover, it also never stopped the target company having to charge all its assets and income to pay off the debt. But that was only true for private companies different rules apply to listed companies.

Financial assistance law was a complete waste of space and the govt was right to get rid of it.

The more I think about the proposal from Labour the sillier it gets. Increasing the threshold from 50.1% to 66% or even 75% will make virtually no difference in practice - most takeovers funded by debt still require 75% acceptance. But if a company comes in and buy shares to 50%+ 1 share no matter what the law says about company takeovers the simple mathmatical fact is that the buyer now controls the target.

Disenfranchising "short term" shareholders. The problem is defining what is short term - is someone who bought shares 1 month before the takeover offer was announced a "short term" investor or simply someone who was lucky with timing and intended to invest long term?

The whole thing has been created by Labour for two reasons (1) Unions finance the Labour party and the Unions do not like takeovers (2) the MPs did not like Kraft treating them with disdain at the select committee hearing (rather pathetic by the MPs). Personally I feel all MPs should be treated with disdain at least 90% of the time and the select committee 100% of the time (bunch of has beens and never will bes)

There is an acronym many people will be familiar with- CNI.
Critical
National
Infrastructure.

Let me reiterate that first word. Critical.
There are already several laws regarding CNI, yet the most patantly obvious one has been avoided at all costs since Thatcher started selling off the UKs most important assets in the 80s. None of these businesses should ever be available for 'plunder' by other businesses.

Now I, along with many others on here, could go into long descriptions of the insanities of certain business practices and rules (Royal Mail and the Power Grid for starters), but suffice to say that no economy can exist without the infrastructure to support it.

Now, bearing that in mind, does this law go far enough?
Not on your nelly does it!

Re 55. The law on financial assistance (until it was changed in the 80s)did in fact originally apply to private companies as well as public. It did stop a lot of deals happening that depended on the target's own resources for finance.Changing the law heralded the arrival of the management (and leveraged) buy-out. This was greeted as the best thing since sliced bread at the time. (Like a lot of changes in the 80s). And, yes, the old law was unpopular, partly because no one could foresee where aggressive leveraging could lead.
Now that we are all learning what happens when leverage gets out of control, we should perhaps reconsider. Maybe the old law was not "a waste of space" after all. Many other countries have laws of this kind: there is a reason for them.
If there is a concern about what happens to target companies once they have been taken over, and that concern is linked to the amount of debt that has arrived on their balance sheet, it is legitimate to ask why it was incurred. If the answer is that it was incurred to finance the takeover itself, not for the purpose of the target's business, you have to wonder why it is allowed. All it takes to ruin a business that was otherwise doing fine is to allow banks to finance aggressively leveraged takeovers and then let the new owner asset strip and sweat the target until he can cover the newly acquired debt service requirement and a return on his investment. There is a growing list of examples showing that even asset stripping does not always deliver the result required. The target then goes into administration. The purchaser may lose some of his investment and the banks may also lose out (although they will usually be well secured) but the people who are usually hurt the most are employees and other stakeholders.
Revisiting these issues would enable a more rational approach to the "Cadbury problem" (and the football club problem) than the somewhat protectionist ideas now on the table. There is of course a huge vested interest against this. Think of the fees at stake! The views of banks and private equity houses (and their advisers) need to be taken with a pinch of salt.