Wednesday 17 October 2018

Top of the Agenda - Shane ross

We will not miss Michael JUST IMAGINE. No more Smurfit AGMs. Just imagine. No more of Michael's arrogance. Just imagine. No more brothers Smurfit, Drs Smurfit, wives Smurfit. Just imagine, no more little Smurfits. The family company could return to making cardboard boxes. The lads could retire full-time to Monaco or South America.

The stock market was euphoric. The prospect of the Smurfit Group without any Smurfits sent the shares into orbit. The price shot up 22 per cent on Thursday morning. Shareholders can at last hope for relief from bondage. Ten long years in the grip of the family has ensured the most miserable share performance. Last Thursday the discount in the shares, the "family" discount, disappeared instantly in the hope that the brethren's stranglehold would be loosened.

Pity Gary McGann, MD designate, who may never hold the title. Gary was due to oust Michael from his perch, in name at least, in October.

And Gary was showing promise. He was making progress in selling an albatross of Michael's making, Smurfit Stone Corporation of the US. Suddenly, a predator swoops to ruin his entire strategy for the company and, more importantly, for himself.

Why would anyone want to takeover JSG? For the same reason that motivates most predators: the prospect of undervalued assets. Unless there is a management buy out, my guess is that the scouts in the packaging industry have been watching JSG for years, that they were beginning to see an inevitable end of the Smurfit family era. They realised that the firm was far more valuable without Michael and his hangers on; so they decided to move before the market re-rated the stock. A piece of naked opportunism, like all good takeover bids.

The Irish stock market will be a duller place without Michael and his cronies. Despite its dismal performance, Smurfits is still the seventh biggest Irish quoted company. If it is absorbed by a US multi-national, it will further undermine the concept of an Irish stock market.

And who cares? We are part of the global economy, the dynamic American version not the European snail, thank God. Indeed it was none other than the head of Smurfits itself, Howard Kilroy, who once insulted his hosts at an Irish stock exchange dinner when he told them that they were only a "pimple" on the global stock exchanges. Prophetically, Howard's part of the pimple is now about to be absorbed.

Next stop could be another piece of Howard's pimple, the Bank of Ireland. The absurd efforts of its new chief Michael Soden (Or is it Michael Sodense?) to fight globalisation by merging the two major banks have proved antedeluvian in conception and stillborn in practice.

Both banks are likely to be taken over. At least Sodense will have been in office for longer than Gary McGann, who will be put down as collateral corporate damage, unless the new owners write a new contract for him. They will not offer a ?5m package to Michael or largesse for his hardworking brothers, Alan and Dermot.

The family has milked the Smurfit cow for the last decade. The shareholders have been abused. I will miss the AGMs. None of us will miss Michael.

Independence is in the mind

CHARLIE McCREEVY deserves the award of the week for electoral mischief. Buried deep in Charlie's cheek was his overactive tongue when he suggested that all parties ask "independent" economists to judge their manifestos.

Charlie has no time for economists. He knows that none of Ireland's best-known are "independent". He couldn't believe his luck when Ruairi Quinn took the bait and nominated the ESRI. When they refused, Charlie suggested they all agree on a few names.

An all-party meeting was arranged. It broke down in minutes. They never reached the names of the economists.

A pity. Because all the parties would have put forward plenty of "independent" players.

FF was ready to suggest all the following: Jim Power of Friends First, Alan McQuaid of Bloxhams, Dan McLaughlin of BofI, Eoin Fahy of Ulster, John Beggs of AIB and Dermot O'Brien of NCB.

Good people, but hardly in sympathy with a rainbow government. All well-known economists.

And what of the omissions? Why were Moore McDowell (UCD) and Jim O'Leary (Maynooth) not on the FF list?

The answer is simple. FF supporters regard Moore and Jim as Fine Gael followers.

The Labour list would probably have included Paul Sweeney, who wrote an entire book devoted to the evils of privatisation. Jim Power and Dan McLaughlin would never appear on Labour's list.

These guys were all high profile. Some love the limelight. Some have party loyalties. Others have distinct ideologies. Many of them have received government work. And they would welcome more. They are suckers for the soundbite.

Is there any way of rating these guys? Or are they simply in show business? Economists in Ireland are held in awe by the public, yet virtually none are scrutinised. When they make a mistake they pretend it never happened and just head for the nearest RTE camera.

Perhaps they should submit themselves to a bit of benchmarking? Last month a group of academic economists were judged by their peers. Brian Lucey of the School of Business Studies at TCD and Alan Barrett of the ESRI issued a paper clinically judging the performance of their peers.

They ranked them not on soundbites, but on their output and the quality of the publication where it appeared. Lucey and Barrett did not judge the guys in the frame last week, the gurus trusted by various parties. In their next report they should. And they should let us know when the lads are compromised.

The academics ranked by the Lucey/Barrett report were not even considered by the parties who so loudly proclaimed their search for "independent" economists. Could it possibly have been because they were truly independent?

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