But, as if to defy those pundits who argued that cash leaving dot coms would flow back to old-economy stocks, there has been no real recovery in other sectors. Unless you had tucked away some oil shares, 2000 proved a painful year.Yet it started so brightly. Despite some off-colour remarks by Chris Gent about Mannesmann’s management, Vodafone triumphed with the largest hostile bid ever made, paying over £80bn for the German phone firm But Vodafone ran into trouble. It was one of five groups thought to have overpaid for third-generation phone licences in an auction that brought the UK government £22.5bn. It also riled shareholders by paying a £10m bonus to Mr Gent. And it was so incensed by Gordon Brown’s tax plans that it threatened to flounce off to Ireland.In finance, Royal Bank of Scotland beat Bank of Scotland in the battle for NatWest BoS then got into merger talks with Abbey National.
Lloyds TSB is threatening to spoil this by bidding for Abbey, but it has yet to get anywhere. A rejuvenated Barclays bought a rejuvenated Woolwich.The media sector was frantic with excitement. In the first old economy/ new economy merger, AOL linked with Time Warner, which in turn was thwarted by the European Commission when it tried to buy EMI. The British music group is now in merger talks with Bertelsmann of Germany.The TV world had more intrigue than Brookside. Carlton agreed a mer- ger with United News & Media, only for the Competition Commission to investigate. When the deal got a conditional go-ahead, Granada stole United’s TV assets from under Carlton’s nose. The White Paper published this month signalled a green light for a Carlton-Granada merger.
Expect fireworks.Globally, Vivendi of France merged with Seagram of Canada, bringing together the Canal Plus TV network with Universal Studios and sparking an auction of Seagram’s wine and spirits business. This was won by Diageo after Allied Domecq pulled out, claiming it had nabbed the rights to Seagram’s Captain Morgan rum.Marks & Spencer began the year under a cloud, and things got worse. In January it faced a bid from Philip Green, the entrepreneur who bought Sears a couple of years ago. Mr Green decided not to bid in the end, preferring to buy Bhs. Meanwhile, M&S brought in a new chairman, Luc Vandevelde, who presided over a cut in the dividend, the departure of the chief executive, Peter Salsbury, and a sharp fall in sales, profits and the share price.British Airways parted company with chief executive Bob Ayling (also sacked as chairman of the Dome) and turned to Australian high-flyer Ron Eddington.
It tried to merge with KLM, but the deal never got off the ground.At BT, chief executive Sir Peter Bonfield kept his job despite complaints from investors. The director of finance, Robert Brace, was not so lucky; the downgrading of BT’s debt rating and the slow progress of its planned restructuring led to his departure.Elsewhere, the chairman and chief executive of Sotheby’s fell on their gavels after the auctioneer was found to have been fixing prices with its main rival, Christie’s. Equitable Life closed for new business after failing to find a buyer; BMW sold Rover for just £10 to the Phoenix consortium; the US courts ordered the break-up of Microsoft (it could be reprieved by George W Bush); and SmithKline Beecham and Glaxo Wellcome finally gained approval for their merger. Andersen Consulting agreed its terms of divorce from Arthur Andersen and renamed itself Accenture.As if to underline the fact that we’re in the 21st century now, the Queen’s stockbroker, Cazenove & Co, opted to give up 177 years of partnership and become a public company. The partners are expected to get an average windfall of £8.5m each – which may have helped the decision..
