I was critical of billionaire investor Dermot Desmond in a recent column because his attempt to throw a spanner into the works of Ladbrokes’ merger with rival bookie Coral was poorly timed, coming as it did a matter of days before the vote. He was thus too late to affect the outcome, and the deal was approved by 96 per cent of investors.
But it is worth considering this: if the merger fails, Mr Desmond will lose a lot of money. So he has skin the game.
The fund managers who approved it, and who have approved too many bad mergers down the years, do not. They play with the savings of other people, and if a merger fails, it’s water off a duck’s back.
If they truly represented the interests of the customers who pay their wages, they might be a little more inclined to act like Mr Desmond when they think they’re being sold a pup by a company – albeit with better timing. Sadly they don’t, because that would upset the applecart and too many fear more for their lunch invitations than their clients.
