Plessey Co Plc’s chairman Sir John Clark is going into the latest battle for the control of his company under the appropriate but somewhat unimaginative slogan: Hold onto your Plessey shares. The two main prongs of his argument in the defence document published yesterday were that the latest bid price from GEC Siemens is too low and that a rejection of the bid is not a vote for maintaining the status quo in the UK electronics industry. To emphasise the former point Sir John argued that if the November 1988 bid which offered 225 pence per share or the market raid under which GEC Siemens bought Plessey shares for 245 pence each in January are projected into the current market using either the FT-SE 100 Index or the FTA Electronics Index that a more realistic price for Plessey shares would be somewhere between 282 pence and 312 pence. In essence, Sir John maintains that Plessey is worth considerably more to GEC and Siemens than the 270 pence offered. In particular Siemens, described by Sir John as the leading protagonist in the bid, will be paying 60% of the total consideration, and if the bid is successful, will gain a strong presence in the UK market, an important 40% stake in GEC Plessey Telecommunications (effectively giving it control over GPT’S technology and market access policies), the control of Plessey Semiconductors and entry into the UK Defence Electronics market. The bid, frequently referred to by Sir John as the Siemens GEC offer to highlight the dominance of the German partner, if successful, will also give GEC outright control of GEC Plessey Telecom, eliminate its main defence electronics competitor, as well as giving it the benefits of an in-house quality microelectronics company. If the bid is rejected, however, Plessey will continue to build on its innovative forays into new technologies and markets (CI No 1,129), will be well-positioned to grow, and, as it hopes its 2% stake in Ferranti International Signal Plc taken last week shows, will be active in engineering a restructuring of the UK electronics industry. If the bid is rejected Plessey will collaborate further with Ferranti and is interested in the Thorn EMI and Racal Electronics defence electronics businesses that are currently up for sale. Finally, Sir John does not expect a white knight to enter at this late stage, and will be calling on 50 major shareholding institutions in the next few weeks to put his case. His strongest card at the moment would seem to be to persuade such shareholders to hang on for a further and higher bid from GEC Siemens. That is an option Lord Weinstock has ruled out in what he insists is the final offer.
