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Comedy lawsuit of the week comes from something called the Steward International Enhanced Index Fund, which is suing Cadbury's top brass for daring not to embrace a (putative) bid from Kraft Foods.
Steward has filed a suit in a New Jersey court saying investors “stand to lose out massively” if Cadbury doesn't accept the £10.2 billion, 745p-a-share deal.
According to its website, Steward Funds “offer investors the opportunity to pursue investment goals while being consistent with cultural values favoured by many Christians”.
It doesn't specify what those values are, but they apparently include ridiculous lawsuits (Jesus was always suing people who wouldn't do what he wanted). Presumably, Steward is an investor in Cadbury because of its religious roots (it was founded by Quakers who liked chocolate because it isn't alcohol or pornography).
Yet it is perfectly happy — indeed keen — to see the company taken over by a global processed-food giant as long as it makes a few quick quid in return.
What this means for staff or the long-term prospects of a much-loved company is not a consideration.
The Steward fund managers may be confused about this Christian business. The suit names the Cadbury board of directors as defendants, including chief executive Todd Stitzer and chairman Roger Carr.
The board, claims Steward, is refusing the takeover offer because it would otherwise “lose its lavish compensation and positions of power if Cadbury is sold”. Actually, as shareholders themselves they'd all be enriched, and in any case might well get to keep their jobs.
It would be nice to think that Stitzer and Carr are holed up in Bournville desperately coming up with a tough strategy to fend off Kraft. But it is far more likely that they are in London meeting investment bankers who are toying with ways to force up the offer rather than send the bidders packing. Saying “no” to what is an informal bid rather than a firm offer is probably no more than a negotiating tactic. For the right price, perhaps £9 a share, maybe £10, Cadbury will sell.
Steward's point is that since details of the Kraft offer emerged, the shares have soared from below £6 to around £8. If the fund is really worried about that extra value disappearing should Kraft give up or Cadbury prove stoical in its resistance, there is one very simple thing it could do now: sell up and shut up.
Laughably, the suit reveals that Steward holds, wait for it, 6720 Cadbury shares. Its entire stake in the chocolate maker is worth less than £54,000 even at today's higher share price — about two days' worth of lawyers fees, in other words.
It is standard practice for companies on the receiving end of lawsuits to say that they are “entirely without merit”. In this case, Cadbury's can say so with justification.
With any luck this case will run into a judge with the sense to be immediately dismissive.
Any sign that it is being taken seriously would set a bizarre and dangerous precedent.
If it attains the class action status Steward is seeking, there's no telling how daft this could get.
Lucky Adam's second chance
ANGER everywhere that Adam Applegarth has a new job — but the new position at least looks like one for which he may actually be qualified.
The former Northern Rock chief executive has pitched up at Apollo Management, which he will advise on picking up distressed debts at supposedly bargain prices. That could include parcels of bad loans on the Rock balance sheet — irony of a sort.
He couldn't spot the true value of these loans the first time around of course but presumably he'll make a better fist of it now.
His return isn't a particular outrage, but it does suggest that he continues to regard the disaster at the bank he ran as an institutional misfortune rather than a personal failing. Shameless.
Some in the City have had a good crisis but arrogant bankers are a disgrace to capitalism
BORIS Johnson delivered a rousing defence of the City yesterday; unfortunately he missed the point.
London's financial centre, is a “vital part” of the solution to the economic crisis, said the Mayor, which is uncontroversial.
He added: “I know how unpopular these bankers are. I know how far out I am on this limb in sticking up for these pariahs.
“But never forget, all you would-be banker-bashers, that the leper colony in the City of London produces 9% of UK GDP, 13% of value added and taxes that pay for roads and schools and hospitals across this country.”
The mistake here is to think that “the City” and “bankers” are one and the same. They aren't.
And banking is so deeply in hock to the rest of us its contribution to the wealth of the nation is presently far less than zero. Insurers, fund managers, Lloyd's of London and stockbrokers can all claim to have had a good crisis.
None of them required a bail-out using public funds. No serious players went bust and most made a decent fist of managing client funds in a falling market.
They performed a useful social service in addition to those profits that they make and those taxes that they pay.
The banker-bashers among us are very specifically complaining about one industry alone, banking.
The people within it are paid entrepreneurial returns even though they operate in a government-sponsored environment. We underwrite the risks, they take the rewards.
It is more than a year since businessman Luke Johnson — nobody's idea of a rabble-rousing commie — wrote in the Financial Times: “The arrogance of certain of our top bankers is a disgrace to capitalism.”
It still is.
