Among the different aspects of the contract carved out by Czech billionaire Daniel Kretinsky with the Government and Royal Mail is the use of the ‘golden section’.
These shares protect strategic assets from foreign invaders. Among the FTSE 100 companies, Rolls-Royce and BAE enjoyed this protection.
It is argued that gold shares lower the market value of the property because the firms set a benchmark and remain busy.
Anyone associated with ‘Turbo’ boss Tufan Erginbilgic at Rolls-Royce knows that’s not the case.
Its transformation has doubled shares in the past year.
Business Secretary Jonathan Reynolds’ handover of the golden share to Royal Mail is designed to deliver good value for Britain, citizens and shareholders on the line.
Golden boy: Czech billionaire Daniel Kretinsky has been given the green light to buy Royal Mail for £5.3bn.
But the golden share, which protects an important strategic asset from foreign plunder, is being used to put Kretinsky in the driver’s seat.
A new golden section will be created requiring the Czech businessman to remain at the Royal Mail headquarters in Britain and pay his taxes here. HQs are the first to go for takeovers.
There are questions about the robustness of that arrangement.
British technology giant Arm has its HQ in Cambridge. But command and control rests with its major shareholder Softbank in Tokyo.
The UK monetary system, which likes to borrow on equity, allows Kretinsky and his team to pay a high interest rate bond, at a high cost, to tax.
Worse still, if Royal Mail gets the wrong deal, the taxpayer may find out. The gold share must be returned to the donor.
Accommodations
Fixing the foundations Labor has stepped in to sort out the unfinished business left by previous administrations.
The new settlement that has emerged from the flames of the past is the military buildings. In 1996 it was decided that it might be a good idea to sell the team’s estate, comprising 55,000 houses, to a private equity group called Annington Property, headed by Guy Hands.
The maintenance contract went to another party. Like many public-to-individual affairs, it was not a match made in heaven.
Controversy arose over the poor quality of the ‘Annington’ portfolio and the fact that Britain’s fighting forces were increasingly housed in sub-standard housing.
The Ministry of Defense sought to regain control of the country, and the whole matter ended up in court.
Under the agreement just reached, the MoD will pay Annington and its investors £6 billion for the surrender of its 999-year leases on 36,000 homes and end all legal proceedings.
Money would have been better spent on soldiers and weapons. Of course? Don’t mess with the private equity barons.
Final orders
Diageo hasn’t had the best of times since Texan Debra Crew took the helm. Buying and adopting animals in Latin America is a big problem.
But Crew will never be forgiven if pubs across the British Isles run dry of Guinness by Christmas. The demand for rock is increasing. Wetherspoons boss Tim Martin threatens Diageo with ‘bad word’.
I suspect that Crew, a former platoon leader in the American Bosnian war, would not be shaking in his military boots.
