Can Sainsbury's escape the Qataris?
LONDON - The bid by Qatar government-backed investment vehicle Delta Two for Sainsbury's made lots of people uneasy right from the start.
Then there's the wider issue of so-called "sovereign" funds, usually from oil-rich countries, buying up quoted Western companies and, in effect, nationalising them.
Actually the Delta Two offer wasn't as simple as this, which was a further cause of unease.
Our gas-rich (or so we're told) friends from the Middle East were planning to borrow most of the money. How come, if they're so rich?
People in the UK quite like Sainsbury's, be they ordinary shoppers or admen old enough to remember Abbott Mead Vickers BBDO's founder David Abbott's holy trinity of middle class accounts -- Sainsbury's, Volvo and Yellow Pages' JP Hartley -- and they couldn't see why this reviving retailer needed to be sold.
The same was true to a lesser extent of Boots, which was sold in the summer to a bunch of investors led by US private equity fund KKR.
But, at some stage, Boots will need radical surgery if it's going to compete successfully with the supermarkets and this will hammer profits in the short term. So at least there's an argument for going private.
Sainsbury's, under CEO Justin King, is doing quite nicely, which is where we came in.
The deal looked almost done. Delta Two had stumped up some more money to mollify the Sainsbury's pension fund and chairman Sir Philip Hampton had let them look at the books.
Even the Sainsbury family seemed to have accepted that, because they no longer controlled the company, they had to go along with the board.
Then last week Delta Two announced that it would have to go back to the Quataris for another £500m of equity to ensure it had enough money to invest in the business.
Warning bells all over the place began to ring.
Clearly with money suddenly tighter, Delta Two's interest payments had risen and the putative tills were empty. Which would leave Sainsbury's a sitting duck for Tesco and Asda.
So is the deal off?
If it is, a number of hedge funds and property investor Robert Tchenguiz, who owns 10% of Sainsburys, will catch the mother and father of a cold as the shares plummet.
As will Delta Two, which has bought 25%.
So they'll fight tooth and nail to keep the deal alive.
But if the banks won't play ball they're snookered.
And it still looks a rotten deal for everyone apart from those Sainsbury's shareholders ready to head for the exit.
The bulls are revving up
There was a loud crash on Wall Street on Friday but it wasn't shares heading south but the tidal wave of money pouring into Microsoft.
The software giant announced quarterly net income of $4.3bn, up from $3.5bn last year. Although it's still losing money on its online activities (where it's belatedly trying to catch Google), everything else is going like a train.
Microsoft's shares rose 9.5%, helping to send markets all over the world higher.
The process continued this morning (Monday) with markets in Hong Kong, Korea, Malaysia and Indonesia touching record highs and Tokyo, which has been in the doldrums recently, rising on good figures from Nissan.
London, Paris and Frankfurt all opened higher too.
So are we set for another bull run?
With another interest rate cut confidently expected in the US the answer is almost certainly "yes".
Schroders backs Arculus plan for Emap
One-time Emap managing director Sir David Arculus is leading a management buy-in attempt at publisher Emap and the company's biggest shareholder Schroders is said to be backing the move.
In most such circumstances this would be game, set and match to Arculus but current Emap chairman Alun Cathcart has rebuffed Arculus once so this is all starting to get a bit personal.
Cathcart has already succeeded in rustling up some firm bids from other media owners (hardly surprising as fire sales are often the place to find bargains).
But if another couple of shareholders come onside soon, Arculus could get the Christmas present he's always wanted.
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