I, for one, am weeping no tears about the collapse of the British Energy takeover deal. Invesco and Prudential – the institutional shareholders understood to have led the backout – are right to say that if energy prices are likely to be high for the foreseeable future then a greater premium should be attached to the price. They’re especially right to be nervous if the matchmaker was one Gordon Brown, who has a reverse Midas touch when making investment decisions. First came his disastrous foray into asset management, selling the nation’s gold at a fraction of today’s price (actually, it’s worth being specific: he sold our gold for $275 an ounce, against today’s $918). Last year, he sold 450m British Energy shares when the price was 490p. They are one of the few stocks in the world to be worth about a third more now than then, so the premature sale deprived the taxpayer of about £900 million – appalling, even by Brown’s standards. Even after today’s slump they’re worth 692p. No wonder Invesco and the Pru are wary about taking Brown’s advice about the right time to sell.
Plan B is that the new nuclear sites are sold, or new sites agreed, one by one – is that really such a big problem? Sure, maybe EDF will not get such a good price for the job lot. This may strain Anglo-French government relations (not to mention tensions in the Brown family – Gordon’s brother Andrew is an EDF director). But I think Invesco and the Pru are right to hold out – demanding a better deal for the pensioners whose money they are guarding. And there is new a golden rule in investing – if Brown says “sell” then the smart money lies in doing the precise opposite.
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