Trafalgar v. Nelson
rrhere is a Nelson touch to the Peninsu- lar and Oriental Steam Navigation Company, incorporated in 1840 by charter of Queen Victoria. It wins its battles at the cost of its admirals. It has now survived two of the fiercest engagements in the takeover wars of two decades. Such times tend to derange judgements, but it must be said that the 70s plan to merge or submerge P & 0 into Bovis the builders looked absurd at the time. (Not so ill-found as it subsequently proved, when P & 0 had to rescue Bovis.) Lord Inchcape, in a minor- ity on the P & 0 board, rallied sharehold- jers to throw out the deal. At that the chairman, Ford Geddes, who had put the deal forward, very properly resigned, and Lord Inchcape succeeded. Lazards, mer- chant bankers to P & 0 (and Bovis) and architects of the deal, lost the account of Schroders. Then, 15 months ago, Trafalgar House, builders, shipowners and much else, hid for P & 0. This time the share-
holders were not on Lord Inchcape's side. He went the round of the big investment managers, but they, harshly, made it clear that the price of their support would be change at the top. Meanwhile Schroders, by a transport of lobbying, had bought P & 0 priceless time by getting the bid referred to the Monopolies Commission. Another P & 0 director, Jeffrey Sterling, became chairman. Poor Schroders prompt- ly lost the account, to Morgan Grenfell. BY the time the Monopolies Commission had cleared the bid, Mr Sterling had put his stamp on P & 0. Beating out working capital, his team wondered why P & 0 Ferries were giving three months' credit. Answer: Sealink was giving six months'. Now P & 0 is no longer in competition with a nationalised industry, life on the narrow seas will be more businesslike. This week Trafalgar House — more interested in oil, nowadays — accepted defeat and sold its P & 0 shares. The buyer was Sterling Guarantee Trust, the property and services business which Mr Sterling. found- ed, and which now has nearly 15 per cent of P & 0. Does that portend a third takeover engagement? If so, surely one which the admiral will survive — strategi- cally placed as he is on both bridges. P & 0 shareholders, who have seen the price nearly treble in a year and a half, can thank him, and thank Trafalgar House for bidding — and should not forget to thank Lord Inchcape, without whom there would not have been a P & 0 to bid for.
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