CITY AND SUBURBAN
The Swiss won't cough up, so the biters can't be bitten — this time
CHRISTOPHER FILDES
Rowntree was half-way down the Swiss throats by the time it was decided not to make them cough it up. Once Suchard had bought 29 per cent of the shares and Nestle another 16 per cent, it was hard to foresee an independent future for Rown- tree. Now it looks impossible. Rowntree may complain that it was the threat unfulfilled — of a reference to the Mono- polies and Mergers Commission that shook the shares loose. The big holders, unwilling to run that risk, sold in the market and made sure of their profits, while the Rowntree board sat and stared, as if they could not believe it, even when it was happening. I now learn that Suchard first approached Rowntree all of four years ago, talking in terms of an alliance marketing each others' brands, and so on. That might have been the first step to a merger, or it might have been the defen- sive alliance which would have saved Rowntree from Nestle. Rowntree would not listen — and Suchard's Swiss bankers have sat on a block of Rowntree shares from that day to this, confident that a bid must come. Once it did, Sir Gordon Borrie at the Office of Fair Trading and Lord Young at the DTI chose to play it down the middle, with a dead bat — Sir Gordon following his test, which is the effect on competition, and Lord Young following Sir Gordon. We can already see, though, that this one test is not enough. Reciprocality — 'do as you would be done by' — must be another, and there are more. Which bid will be the catalyst for them? The next one — which looks like Cadbury?
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