Let's hope Somerfield, the strongest of the two, hasn't fallen for a pup in finally providing Jardine's with an exit.Whingeing UBS bankersIt is hard to feel much sympathy for the whingeing stars of UBS as the curtain falls on this glorious City gravy train. One way or another the Big Four are determined to become the Big Three. And there will be more mergers and deals in the second division with Iceland, Budgens and so on. Separately there is likely to be a similar shake-out in the discount sector.For Jardine Matheson, which controls 29 per cent of Kwik Save through Dairy Farm, this has been another spectacularly poor investment over the years, though not quite in the same league as Trafalgar House. This merger doesn't provide a solution in itself but it should strengthen their hand.Certainly it will provide a cue for others to follow UK supermarkets have been hot to trot for some time. Its 1,400 outlets belie a long tail of no-hopers that will be haemorrhaging sales and probably losing money. Management won't be able to give them away.Even so it is hard to see what else these two managements could do.
Somerfield and Kwik Save have both been caught by the increasing dominance of the major supermarkets and the ruthless discounting of Continental groups like Aldi and Netto. Moreover, it will also have the weakest brand and the poorest portfolio of stores. It may have a bit more muscle in the buying department but Tesco and Sainsbury's are still going to punch its lights out. In a sector where might is right, Somersave or KwikField, or whatever it might be called, is still going to have only half the sales and market share of the top two. This is a merger akin to two lightweights getting together to form one bigger, but still dis-advantaged middle-weight. As one analyst puts it delicately; "It is a pimple on the backside of some of the others." This may be a little bit of an exaggeration, but it is also largely true. We've had Glaxo-SmithKline, SBC and UBS, Guinness-Grand Met and now we have, er, wait for it - Somerfield and Kwik Save.
In the wave of global mega-mergers sweeping industry and commerce this one hardly registers on the radar. The deal, flagged by Belgo last month, will see the first Belgo restaurant open in New York within the next 18 months.. Capitalmarket was formed recently to make the offers with financing arranged by Deutsche Morgan Grenfell's private equity division.. Energy Group, owner of Eastern Electricity, recommended PacifiCorp's pounds 4.06bn cash offer earlier this month, but Texas has continued to talk to Energy Group, keeping alive the possibility of a rival offer. PacifiCorp estimated Texas would need to offer more than 820p to match its own bid and compensate for regulatory uncertainties and any resulting time lag.. Offer for oil explorer AIM-listed Sibir Energy yesterday launched a recommended share exchange offer for its fellow Russian oil exploration company Pentex Energy in a deal which values Pentex at about pounds 75.6m. The offer is on the basis of 67 Sibir shares for every 100 Pentex and represents a 27.82 per cent premium over Sibir's mid-market price on January 15, the day before merger talks were announced..
