CITY AND SUBURBAN
Porpoise treads on Standard Chartered: will they, won't they, join the dance?
CHRISTOPHER FILDES
the takeover sportsmen blast away at them, as though they were as fair game as any other company caught with its price flying dangerously low? Standard Char- tered, our biggest bank outside the Big Four, is at the core of the case, as it was five years ago when the governing prece- dent, muddled and unsatisfactory as it is, was set. Standard Chartered's trouble, then and now, is that it is busy in 60 Countries but painfully under-represented in its own. In 1981 it sought to remedy that h. y taking over the Royal Bank of Scotland in an agreed bid, blessed by the Bank of England. Then in marched the Hongkong & Shanghai Bank, ready to bid much more. Chairman Michael Sandberg called on the Governor of the Bank of England, Gordon (now Lord) Richardson, and the conversation took the following lines: Have you the agreement of the Royal Bank's board?'
`No, Mr Governor. We haven't told them yet.'
`Then you may not bid. The Bank of England will only approve of bids for banks when they are agreed by both boards.'
`But how can they agree until we bid for them?, After this Mr Sandberg defied the light- ning, and bid. An auction followed. The Bank insisted on its authority, asked for this to be given legal backing, was refused, changed tack, and suffered both bids to fall under the jurisdiction of the Monopolies Commission, whch conveniently blocked them. Now Standard Chartered is on the receiving end. A month ago (City and Suburban, 15 March) I recorded that Stan- dard Chartered's commanders were pre- Paring their defences against a bidder; they sensed (I said) a porpoise close behind them and a-treading on their tail. The shares ended that week at 533p: since then they have risen by two-thirds. The por- Pnise has revealed the scholarly features of Sir Jeremy Morse, chairman of Lloyds !lank. Sir Jeremy, old Bank of England nand that he is, gave the Standard Char- tered board a public invitation to agree on a bid of 750p. That price has been over- taken by events, Standard Chartered has shown Sir Jeremy the door and is settling down to justify its independence, and Lloyds must now put up or shut up. Either choice may well flush out another bidder, less regarded than Sir Jeremy. The Bank of England cannot be content to say, 'Let 'em all come.' Ministers have belatedly realised that catch-as-catch-can takeovers spell political trouble, and have set up a review of merger policy. It should begin with a call on Threadneedle Street.
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