SCOTLAND’S quoted company landscape looks very different indeed from that in the mid-1990s, when big names such as General Accident, Stakis, Kwik-Fit, and Scottish & Newcastle graced the stock market screens.
Back in those days, we had two firmly Scottish-based clearing banks in Royal Bank of Scotland and Bank of Scotland. These banks were the subject of repeated bid speculation, and those days were not without worry that one or other or both of them would be swallowed up by a larger player. However, they were sizeable banks with real clout, and crucially with decision-making occurring most definitely in Scotland.
Over the following years, General Accident, Stakis, Kwik-Fit, and Scottish & Newcastle were all acquired.
READ MORE: Ian McConnell: Sorry tale for Scotland as yet another major company faces takeover
Royal Bank, after its highly successful acquisition of NatWest at the start of the millennium, came close to collapse as the global financial crisis got under way in earnest in the autumn of 2008. It had to be bailed out by the UK Government and, now rebranded as NatWest, the institution is run from London by its chief executive, Alison Rose. Bank of Scotland merged in 2001 with Halifax to form HBOS, with the enlarged entity based in Edinburgh. However, HBOS was swallowed up by Lloyds in a rescue takeover as the global financial crisis took hold.
The effect for Scotland of losing the power bases of two big banks should not be underestimated.
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Macallan, when it was part of an independent stock-market-listed company back in 1996, was bought by Highland Distillers, which was in turn acquired by Edrington in 1999. This acquisition by Glasgow-based Edrington, while it removed a Scottish company from the stock market, looks to have been very good news for corporate Scotland. Edrington has over the years since the deal enjoyed impressive growth in profits. And Edrington’s principal shareholder, The Robertson Trust, has donated £322 million to charitable causes in Scotland since 1961.
However, in most cases, the loss of Scottish companies as independently listed businesses run from here has been a matter for regret rather than celebration.
READ MORE: Denial after denial from brass-necked Tory arch-Brexiter
It was thus somewhat demoralising to hear on Monday that venerable Aberdeen oil services company John Wood Group had opened its books to enable US private equity outfit Apollo to formulate a firm takeover bid – a development which formed the basis of my column in The Herald on Wednesday.
Of course, the lamentable disappearance of major stock-market-listed companies through takeover is not specifically a Scottish problem. It is also an issue that has affected the UK as a whole. And things on this front have not been helped in recent years by sterling’s post-Brexit weakness, which has meant that it is much cheaper for overseas buyers to snap up UK companies than would otherwise have been the case, whether these businesses are listed or not.
Suitor Apollo has been hovering for months around Wood, with a series of unsolicited bid approaches previously rejected by the Scottish company following only “limited” engagement with the private equity outfit.
The detail of Wood’s statement on Monday, in which it revealed its decision to effectively open the door to a takeover by Apollo, was interesting.
The Scottish company’s board made no bones about “feedback” from shareholders having been a key factor in its granting of access to “due diligence materials” to Apollo. At the same time, Wood’s board emphasised its confidence in its "strategic direction and long-term prospects" and hailed 2022 as a "transformative" year.
The column concluded that a takeover of Wood would add to a string of miserable news for Scotland in the context of the nation’s huge loss of stock-market-listed companies and major headquarters in recent years and decades.
On the subject of miserable news, official data on Wednesday showed the UK had turned in the highest March inflation reading for Western Europe.
Annual UK consumer prices index inflation was 10.1% in March. Although this was down from 10.4% in February, the March reading was more than five times the 2% target set for the Bank of England by the Treasury. And the annual consumer prices inflation rate in the UK in March was more than double that of 5% for the US. Eurozone inflation in March is estimated to have been 6.9% on the harmonised index of consumer prices measure.
These comparisons most definitely blow yet another hole in the Conservative Brexiters’ desperate portrayal of the cost-of-living crisis in the UK as having been caused only by global and not home-grown factors. This is not the case.
Yes, there are global factors at play. But we must not overlook the simple reality that a large part of the far worse inflation situation in the UK is very home-made indeed – in the form of the ruling Conservatives’ hard Brexit and the woeful impact of this folly on the cost of living for the population at large.
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