Every company used to have one. The curmudgeon whose habitual contribution to the strategy discussion was a slow intake of breath, a shake of the head, and a gloomy judgment on the latest plan: “We tried that in 1980: complete disaster.” Read more
Shareholders in BAE Systems and EADS should know what they’re getting into. The FT’s Alison Smith laid out the governance pitfalls on Friday, and Steven Davidoff has pointed out for the New York Times’ Dealbook that setting up a dual-listed structure requires an “unbelievably complex set of agreements in which [the companies] agree to equalise their shares, run their operations collectively and share equally in profits, losses, dividends and any liquidation”.
But a picture is worth a thousand words, so here are three illustrations of the full horror of some dual-listed structures. Expect EADS-BAE, with the added political and defence ingredients, to be 100 times more complex. Nice work for investment bankers, corporate lawyers and company secretaries; hard work for everyone else.
1. This classic describes the consequences of Reuters’ 2008 merger with Thomson Corporation (from the 545-page prospectus that one investor likened to War and Peace). Easy to see why the Anglo-Canadian DLC ended up abandoning its London listing in 2009:
Royal Dutch Shell’s plan to reintroduce attendants to the forecourts of Britain’s petrol stations is bothering me.
Don’t get me wrong, I’m all in favour of better service, but, as everyone knows, such improvements – particularly the personal “shall I check your tyre pressures, madam?” service promised by Shell – cost money. I’ll drink a litre of unleaded if the Shell plan isn’t really based on selling more stuff. Read more
I understand why Shell UK plans to close its final salary pension scheme to new recruits, but I hate the justification. The company told the FT that the decision “reflects market trends in the UK”. That’s precisely the sort of reasoning that you hear from companies and their bosses when they wish to award their chief executive a hefty pay increase. Read more