Skinflint's City Diary

What amounts to a reverse bid for Ralli by Bowater has just scrapped through, thanks to the Prudential's five per cent holding of Bowater has just scraped through, thanks strength in the contest, defeating Trafalgar House, The majority of shareholders were wisely not persuaded to take what was made to appear a higher paper bid from Trafalgar. Bowater should do much better with Ralli, particularly with Raili's Malcolm Horsman as a new vice-chairman. The down-side risk for Ralli shareholders is reduced, wallowing as they now are in Bowater's assets.

Remember: there are an awful lot of Bowater shares now at issue and, after the market finally stablises and operators have withdrawn it may be a long time before there is any strong upward thrust in the Bowater price.

Inchcape and Jessel

What one would have thought were the incompatible interests of Lord Inchcape and Oliver Jessel have seen off the attempted reverse takeover of P & 0 by Bovis. P & 0 owe much to Oliver Jessel and should invite him to become a director. Sir Andrew Crichton, a Jessel man, admittedly remains on their board as well as being a director of Jessel Trust and the Jessel Britannia Unit Trust Group. Oliver Jessel is no doubt keeping his fingers firmly crossed, hoping the remaining directors start revitalizing P & 0 quickly, or he will have severely burnt his fingers by so heavily buying P & 0 stock at the high price put on it during the bid.

Monopoly Commission

Since the definition of a monopoly in Britain is an organisation that takes more than thirty per cent of national sales, it is unsurprising that the P & 0/Bovis and Bowater/Ralli bids were not referred to the Monopolies Commission. The press and City were quick to say that if Trafalgar House had succeeded the bid would have been put into limbo whilst the matter was being referred to the Monopolies Commission — goodness knows why, since the thirty per cent rule would not have been broken. Pathetic as the Monopolies Commission seems to outsiders, it would be fair if all bids were automatically referred to it, whilst it still exists, for examination on grounds other than market dominance.

Conglomerate bids, usually random by nature, do not usually draw opposition from the Monopolies Commission. However, an idea we might borrow from Australia is to have a three months' standstill on all large merger proposals that might possibly be contrary to the public interest, even when there is no question of the creation of market monopoly or cartel. Such a three months' standstill would allow all those interested to put their case. Most important, it would ensure that a bidder's share price that might have been temporarily puffed up, and, victim's price that might have been temporarily depressed, by parties to the deal, would have a period of correction during which both the bidder and target victim should be made to produce fully audited three-monthly accounts instead of imaginative profit forecasts.

Lazards boobed?

It looks to me as if Lazards boobed on behalf of Bovis. It would not be surprising if the shrewd Lord Cowdray and the future heads of the Cowdray empire, Michael Hare and Mark Burrell, do not go into a huddle to see if it would not be as well to head-hunt for some aggressive young merchant bankers for Lazards, to replace some of the old greyheads there, who have been made to look as if they were past their best.

Warm spot for Dimplex

Dimplex Industries make electric-oil filled radiators. This fine business was founded by Mr Eric Wade after the war and is at present capitalised at £11.7 million on a price earnings ratio of 14, which should look conservative if we are able to count (as we usually can) on another miserable long cold winter. I have a warm spot for the shares.

As an owner of a Dimplex electric oilfilled towel rail I have been meaning to write to Mr Wade for some time. These towel rails are most handy and contain some sort of thermostat, but they are fairly expensive to run continually. No doubt Dimplex advise their customers to fit a time switch, though something built-in would be more useful so that the thing would switch on for a fixed period in the morning and evening. My own invention — which I am prepared to give Dimplex gratis — is a time-lapse switch. After Putting a wet towel on the rail you would simply kick a switch which would turn on the heater and cut out, say one hour later, when the towel was dry.

Gilmour's Temple Bar

It has been overlooked during the awakened debate on the future of Temple Bar that it is the property of one of Mr Heath's ministers, the Minister of State for Defence, Ian Gilmour, who once owned The Spectator. Temple Bar was re-erected in Theobald's Park a hundred years ago on the widening of Fleet Street by Mr Gilmour's Meux relations.

The Enfield Preservation Society are Urging the return of Temple Bar to a suitable site in the City of London, because they are concerned about the forlorn state Into which . this historic monument has fallen. Since the cost of removal and reconstruction is estimated at what might today be considered the relatively insignificant sum of £40,000, I should have thought that a fund-raising campaign, sponsored by Whichever London council is anxious to give it a site, would be enthusiastically supported, not least by Mr Gilmour, who is a millionaire and rolling in money.

Dencombe Place

There is nothing like a high stock market to bring out deep inflationary spending instincts. Share owners feel free to gear up by borrowing and to make extravagant purchases without going through the preliminary procedure of liquidating stock. It is for this reason, I strongly suspect, that the prices of the more desirable London and country houses rise so strongly with the index.

The buying and sale of one particular estate within the course of a year is completely unconnected with the stock market. It is the Dencombe Estate near Haywards Heath, which was once owned by Sir Giles Loder. John Bentley of Barclays Securities bought the house and four cottages with 127 acres for over £200,000 last year and he sold it this week for £277,000.