People are beginning to take seriously the gossip of a bid for GEC Plc – about the only kind of news about the company that can move the shares north these days, and the counter was up tenpence at 302 pence in active trading yesterday: a crucial weakness of GEC is that although it is a very big company, it is too many only loosely-related activities to be big enough in any one of them, and crucially, its Marconi electronics business is still bogged down with too many defence and too few civilian technologies, and has not been growing; it is clear from the Japanese model that a broadly-based electronics company needs its own captive semiconductor capability, yet GEC is said to be thinking of selling GEC Plessey Semiconductors rather than build it into the company it could be; all in all, a break-up that passed most of the heavy engineering businesses to their joint venture partners and raised (yes, yet more) cash to finance a rapid expansion and diversification of GEC Marconi begins to look attractive.
