Pride over purpose

Executive pride is an unusual beast and one that doesn’t often leave the boardroom to show its face in public, but when it does, it can seriously get in the way of achieving the right result at the right price.

  • E-Mail
By  James Bennett Published  February 16, 2006

|~||~||~|Executive pride is an unusual beast and one that doesn’t often leave the boardroom to show its face in public, but when it does, it can seriously get in the way of achieving the right result at the right price. The exhausting bidding war between Dubai Ports World and PSA International over the sale and eventual takeover of the UK’s 165-year old P&O is a perfect case in point. Not only has it been one of the most protracted and aggressive takeover sagas since Oracle merged with PeopleSoft 12 months ago, but it has also been one where both parties, win or lose, could come out seriously bruised and battered when it is all over. Sure, if you were DPW or PSA, having P&O under your belt would make you one of the world’s most powerful ports authorities and enable you to compete with, if not eventually dominate your global competitors. DPW would become the third largest player while PSA would surpass Hong Kong’s Hutchison Whampoa as market leader. The target for both is the correct one both strategically and financially, but as several analysts have suggested, the situation has now become a battle of egos instead of one for financial control. As a result, not only has P&O become seriously overpriced, but more worryingly, all three parties are aware of the games they’re playing and continue to try and out-do each other. Pride has taken precedent over purpose. This isn’t unusual in business, but to do this so publicly will leave one side feeling the prize has been lost and the other embarrassed. P&O, however, will be left smiling after seeing the latest 520p (US$9.20) share offer from DPW represent a 71.3% premium of its closing price on 27 October last year. Of course, look at it the other way and if DPW outguns PSA in the battle over the world’s seas then it will emerge as not only one of the region’s biggest players but also as a future global giant. In other words the rest of the world is rapidly realising that the Middle East, its companies, senior chief executives and grand ambitions are fast stamping their authority on the global market. These companies are not only doing well in their respective homelands, but they are also taking on global businesses, investing in foreign success and in some instances eyeing up further audacious takeover bids. One senior analyst and an expert in the Middle East told me at a recent conference that it was almost certain that one of the region’s most dominant telecoms players would take over an international rival. People are starting to sit up, take notice and watch their backs at the economic strength and monetary power the region has within its grasp. There has never been a better time to be a CEO in the Middle East and we know it. In this issue, and in the future, we will interview the top chief executives in the region, tell you what they think and analyse the issues that every CEO wants, needs and should know. I hope you enjoy the first issue of CEO Middle East and that you stick with us through what will be some of the most exciting times the region has ever seen. ||**||

Add a Comment

Your display name This field is mandatory

Your e-mail address This field is mandatory (Your e-mail address won't be published)

Security code