Companies (Abandoned Merger Proposals) (Hansard, 9 July 1973)

§ 19. Mr. Tebbit
asked the Secretary of State for Trade and Industry under what Act he has powers in relation to proposed mergers of public companies after the proposals have been abandoned by the boards of the companies concerned.

§ Sir G. Howe
If a proposed merger is abandoned after reference to the Monopolies Commission for investigation, the commission is required, under Section 6(7) of the Monopolies and Mergers Act 1965, to lay the reference aside if it appears to it that the proposals have been abandoned, and if the Department consents. However, if required by the Department, the commission has to furnish such information as the Department may require as to the results until then of its investigation.

§ Mr. Tebbit
Does my right hon. and learned Friend agree, in view of what he has said about his powers, that he should regret going as far as he did on 20th June in pursuing a post mortem on the wild goose chase which the right hon. Member for Bristol, South-East (Mr. Benn) raised after the proposed merger of Slater Walker and Hill Samuel? Does he agree that it is time that this House paid more attention to the matters over which it should have and has control and less attention to those matters over which it has no control, whether it be abortive mergers, psychedelic advertisements on buses or tennis players who do not play tennis?

§ Sir G. Howe
I am glad to think that some of the matters raised by my hon. Friend are outside my responsibility. My hon. Friend is right to remind the House that the purpose of the legislation is to ensure that significant mergers do not take place without adequate consideration of possible effects on the public interest and that it does not bear on a proposed merger which has been abandoned.

§ Mr. Benn
When the Slater Walker and Hill Samuel merger came to the right hon. and learned Gentleman for consideration, he extracted assurances from the parties involved which he held to be in the public interest. Is he saying that, because that wild goose became a lame duck, those requirements are no longer necessary in the public interest? If so, is that altogether a satisfactory state of affairs?

§ Sir G. Howe
I know that some commentators have concluded from the fact that those conditions ceased to be relevant, because the merger did not go ahead, that there was some general change in the Government's view about such matters. I can only say that the particular conditions, for example, in relation to warehousing are matters which are under consideration and that the House will have to await publication of the Government's proposals for company law reform.

§ Mr. Norman Lamont
Can my right hon. and learned Friend confirm or deny a report in the Evening News last week that the Government intend to make a statement clarifying the guidelines under 1015 which references are made to the commission? Is he aware that there is considerable confusion about the criteria?

§ Sir G. Howe
The question of the criteria applied to references to the commission was the subject of statements by my hon. Friend the Under-Secretary of State concerned with industrial development before Christmas and by my hon. Friend the Under-Secretary of State concerned with industrial and consumer affairs during the Committee stage of the Fair Trading Bill. There is no intention at present to add to those statements.

§ Dr. Gilbert
Is the Minister aware that, following his refusal to investigate the circumstances surrounding share dealings in Slater Walker and Hill Samuel, I wrote to the City Take-over Panel? The panel said that it could do nothing and referred me to the Stock Exchange. I wrote to the Stock Exchange Council, which was unable to say what dealings had taken place or at what time before or after the announcement to merge. Can the right hon. and learned Gentleman tell the public what safeguards they have against unscrupulous manipulators if he will do nothing, if the Stock Exchange Council does not know what is going on and if the City Take-over Panel will do nothing?

§ Sir G. Howe
The hon. Gentleman postulates the premise of unscrupulous manipulation. He is aware of the powers which my right hon. Friend and I have under the Companies Acts. If he has any further information in relation to the transactions, I shall be glad to receive it.

§ Sir D. Walker-Smith
Can my right hon. and learned Friend give the criteria in respect of the departmental consent referred to by him in his initial answer to the Question?

§ Sir G. Howe
I would need notice before giving the precise criteria, but I believe that. once a merger has been abandoned, it is unusual for the Department not to consent to withdrawal of the reference.