A slight case of megalomergia

Hotel Cipriani,
Venezia, Venice,
Italy

I leave word I am not to be disturbed here, if Sandy and John plan on bolting us on, or Harvey hopes to put the Last National on his plutonium Amex card, or anyone else wants one more bank for a full house, they can leave their names with reception at Moorgate and form an orderly line when I get back.

A guy needs to brainstorm in peace, I pick up a paperback management guide at the airport and this is what it says, true brainstormers distance themselves from their corporate culture, to pull ideas off the wall in an environment that is stimulating but stress free, and if this turns out to be a truly expensive hotel a long way away from the office, then at least they can charge the paperback guide to expenses, along with everything else.

Suddenly our market is hit by a tidal wave of mergers, and I figure I must have a strategy for it, before I discover it has one for me, this is what happens to Frank and the boys round at Mellon, the New Yorkers bid for them without even asking nicely, and for all I know Frank never gets round to having his contract extended, no wonder they reach for their lawyers.

So I have us all booked in at the Venice Cipriani, which lets me bring Holey Buckett along, it is nothing but the best for Holey when other people are paying, do I tell you we settle up with him, and bring him back on side as our corporate finance adviser, he moves into Standard Chartered's old palace and rebadges himself as Sharkfin.

He says he can bring a colleague with him who is his new head of group strategy and just the guy we need, on account he is the chief policy adviser to the last administration back in Britain, where his policies go down so well with the voters he works himself out of a job, and is now free to give us inputs, which he sure does, we call him Brainstormin' Norman.

To balance the team I call up my old friend the billbroker, now that broking bills becomes a dying craft, not to say stone cold dead in the market, the guy has more time on his hands, so I bring him on board as an outside director, he chairs our remuneration committee and has strategic responsibility for lunch, and that makes the total except for our girl who comes along to take notes.

We all meet over dinner quite informally and start again after breakfast, with a big presentation from Norman, all about brands and franchises and economic units and consolidation, and how in Europe they move with the times and consolidate their currencies, and this must be telling us something.

I have to drag us all back to the point, the first question for us is where all these mergers come from, what sets them off, but this sets Norman off on his presentation again, until our lunch director interrupts him, saying, Come on, now, we all know the banks have money coming out of their ears, and they do not wish to waste it on their own stockholders, so they waste it on each other's stockholders instead.

By now I am worried about our group's chemistry, maybe these two come to blows unless the midday Bellini cart gets to them first, I draw Holey into the argument and he tells us how in corporate finance terms we must regard this as an opportunity, which I figure for a major fee earning opportunity for Sharkfin.

He explains his surefire technique, first he puts it around how we are a natural bid target, and just the thing for Barclays if it cannot have NatWest, and this sends our stock price up so far and fast we can afford to make bids of our own, and all we need is to hit on some target that does not think of this first, there must be some sleepy mutuals still around where we can buy off the managers rather than the owners.

Norman rises to this one, he says the fundamental choice of options is between synergy and outreach, meaning do we want to pay too much for a business we understand and then try to make it less expensive, or do we want one we know nothing about, so as to widen our product range and enable cross selling, like Sandy and John?

Outreach is what we try last time, I say, and all our commercial competitors too, we go swanning off into investment banking, and what do we find, the only thing more painful than going is coming out, unless it is Holey kicking me under the table, and this is why I favor sticking to our knitting and buying the Fugu Fish Bank of Hokkaido as soon as our friends in MoF come out of jail.

Then Norman starts to preach about the dawning age of universal banking, until he reaches down and rubs his shin and falls silent, and our lunch director yawns and tells us if we want a discount house he can probably find one, tho' the cellar may be gone, but he figures what we must do with our money is to put it in an ant proof chest and sit on the lid.

Face it, he says, the banking cycle has not been abolished, there are bad debts just around the corner, and busted banks too, capital in excess is no longer their problem, how often do we see it and how lately, why, a few years ago you can buy Citicorp out of petty cash, just wait for the wheel to come around.

Mom, this advice carries the day, we agree that Holey pumps the stock up so my options come up above water, and we get Merger & Might to look over my contract and make sure it is watertight, and I authorize the purchase of an
ant proof chest, king size, and hope to fill it.