It's not big and it's not clever, it's just a Brit in Hong Kong writiing (mainly) about Hong Kong
So there I was in the usual throng of people waiting to get on the plane. A middle-aged man was trying to get past me, and became upset when I didn’t immediately get out of his way.
He spoke. “Typically, I like to be with my children”. I looked around for a distraught seven year-old, but all I could see were two teenage girls who seemed fairly unperturbed to be momentarily separated from their father.
But of course I let him through.
I was recently asked what “invaluable” means. Simple enough, but also rather puzzling when you consider that in+valuable should mean not valuable, as in words such as inconsistent and inexact.
The explanation is that valuable used to mean something that you could value (in contrast to something that is impossible to value, or priceless). So you might have said that a pound of potatoes was valuable (because we can calculate its value), whereas good advice was invaluable.
Of course, valuable has now come to mean something with a high value – though it is often used almost interchangeably with invaluable, thus causing great confusion to anyone trying to learn English. See also: flammable and inflammable.
What is it with people who design upgrades to software?
I was prompted to ”upgrade” my Nokia PC Suite to Ovi. This brilliantly designed piece of software thinks that I want to copy all the music and podcasts from my PC to my mobile phone. I don’t. And there isn’t space.
Never mind, it just goes ahead and tries to use up all the space that is available. Then the phone displays dozens of messages telling me that there is no space. Well, thanks for that.
The only solution I could find was to delete most of the podcasts off the phone (to create some space) and then manually remove a lot of the music from the Ovi desktop software. Eventually it was able to synchronize. What a mess.
What were they thinking?
Why does the SCMP publish a letter from someone living in South Africa about US domestic politics?
Reject Kagan
US Solicitor General Elena Kagan’s ascendancy to the Supreme Court should be emphatically rejected.
Kagan has not yet had time to develop a mature philosophy of judging.
People need to know of Kagan’s agenda-driven approach to legal interpretation, which in terms of the life issues is out of step with the mainstream of the American public.
John Smith, Sandton, South Africa
A quick Google search reveals that a longer version of the same letter has been published in the Barbados Advocate (a publication of which I had not previously been aware), but that “John Smith” claims to live in Brooklyn. Curious.
Save time and money, it says.
By signing up for two years, you save the Society the expense of sending renewal reminders to you next year (and you help us conserve paper)
Well, if you want to save paper maybe you could resist the temptation to stuff the envelope with all these different bits of paper. That I really don’t need.
Thanks, that’s all.
When Prudential’s ill-fated attempt to buy AIA was first announced, the SCMP was very slow getting on to the story. Today (Thursday) they even seem to have more coverage than the FT (or at least its Asian edition), so I think I wasted HK$28 on the pink ‘un. This is one of the SCMP’s three stories:
AIA staff celebrate Prudential deal collapse
Enoch Yiu
Jun 03, 2010The champagne corks were popping at American International Assurance offices in Hong Kong yesterday after the collapse of the deal with British insurer Prudential.
AIA staff and agents feel more secure in their jobs and are hoping parent American International Group will revive the listing of the company in Hong Kong in the third or fourth quarter. Insiders at both AIG and AIA said a separate listing of AIA would give them a better chance of keeping their jobs and receiving share options.
"I am a shareholder of Prudential and was prepared to vote against the deal," said one AIA staff member. "This is the time to celebrate and we plan to have a drink as our lives can get back to normal now."
The staff member, who did not want to be named, said many AIA staff and agents had felt uncertain since Prudential’s offer in March of US$35.5 billion to take over AIA. Their main concerns were job security and change of management style.
"AIA and Prudential have many differences in their history, background and management style," the staff member said. "If the merger had proceeded, many staff and agents might have faced lay-offs."
Prudential would lay off agents from AIA? What would be the point of that? Isn’t it the sales force that they wanted to acquire?
Another person familiar with AIG and AIA said the management and agents have never been happy with the idea of the merger with Prudential. "Management feared a merger would lead to the loss of their jobs while the agents worried about a change of house rules and sales practices," the person said. "For senior management and some agents, many of them hoped the listing of AIA would give them share options."
Well, yes, that seems closer to the truth.
Well, well. Common sense prevails (for once) and a huge and stupid acquisition is abandoned.
Prudential top brass fight for their jobs as AIA takeover abandoned
Prudential has bowed to shareholder pressure and formally abandoned its attempt to take over the Asian insurer AIA, leaving its management team with a £450m bill as they fight for their futures.
In a statement released overnight, the Pru said it is terminating its negotiations with AIA, after parent company AIG refused to accept a reduced offer of $30.375bn (£24bn) against the original terms of $35.5bn.
Pru chief executive Tidjane Thiam, who is under pressure following the deal’s failure, insisted that he was right to target expansion opportunities in the far east.
"We entered into this potential transaction from a position of strength in Asia and we view the region as offering excellent growth opportunities for Prudential," he said.
Blah, blah…
Pru chairman Harvey McGrath blamed recent market turbulence for sinking the "excellent opportunity" to buy AIG’s far eastern assets.
"We listened carefully to shareholders over the price and initiated a renegotiation of the terms with AIG. Unfortunately, it has not been possible to reach agreement so we feel it is in the best interest of our shareholders not to pursue this opportunity," said McGrath.
It was never an “excellent opportunity”. If Prudential have money to invest in Asia they should be using it to grow their own business, or buying much smaller companies that they could absorb.
The Pru must now pay a break fee of £152.5m to AIA for walking away from the deal, plus £81m in fees to City institutions. The rest of the £450m was incurred in legal and advisory fees, plus the estimated cost of various derivatives contracts which were taken out to hedge the value of the pound against the dollar. These contracts were needed because the Pru planned to raise £14.5bn in a record-breaking rights issue, but pay $23bn in cash. The pound had fluctuated against the dollar in the months since the bid was launched, and some analysts believe this may actually have generated profits, reducing the total cost of the failed bid.
Leading City investors warned last night that both McGrath and Thiam face calls to step down. Robin Geffen, chief investment officer of the fund manager Neptune, said the pair were guilty of attempting to buy "a large Asian company, at a very high price, with a very unclear strategy". James Chappell of Olivetree Securities questioned whether investors still had faith in Thiam, who became chief executive last October.
How can investors have any confidence in Thiam? Surely he has to go.
Prudential’s madcap scheme to buy AIA is still not going well. Earlier in the week, the CEO of AIA was reported as telling friends that the deal was “unworkable”, and now they are trying to reduce the price. And the SCMP finally seems sufficiently interested in the story to have assigned one of its own writers rather than recycling agency reports:
Prudential seeks price cut to save AIA deal
British insurer in talks with AIG for discount to win over investors opposed to buyout
Prudential is scrambling to secure a last-minute discount on the US$35.5 billion price it is paying for Asian rival AIA Group, in a bid to save the controversial buyout that a significant minority of its shareholders oppose.
The British life insurer said it was talking to AIA’s US parent, American International Group, about changing the terms of the transaction. It would now offer US$30 billion for AIA, analysts at Bernstein Research said, although Prudential did not confirm this.
While it is highly unusual for shareholders in blue-chip British companies to vote against acquisitions, Robin Geffen, a London-based fund manager who has set up an action group to oppose the takeover, said 20 per cent of Prudential’s investors supported him.
Even at US$30 billion, some investors say the ambitious takeover remains too risky, because the British firm will still be paying vastly more than its £13.7 billion (HK$155.62 billion) market value for AIA.
"Discussions regarding the current status of the transaction have taken place between Prudential and AIG and are continuing," Prudential, which is primarily listed in London but also joined the Hong Kong stock exchange on Tuesday, said. "These discussions may or may not lead to a change in the terms of the combination of AIA and Prudential".
"Paying US$5 billion less is a side issue," said a British fund manager, who owns Prudential stock but cannot talk publicly about individual companies. "And shareholders who are against the deal have other fundamental concerns."
The investor said Prudential could fail to integrate its already large Asian insurance sales force with AIA’s because the two companies had operated as bitter rivals in this region for decades.
Well, indeed. That won’t be easy to solve, as Mark Wilson understands.
He added that he was "very uncomfortable" with Prudential chief executive Tidjane Thiam’s plan to rapidly transform the insurer into an Asian business.
"This is a stable British company paying good dividends. After this deal, over 80 per cent of its business would be in Asia. And I don’t run an Asia fund," he said.
Today, the Observer takes a negative view (Prudential’s bid for AIA wilts under heat of criticism), whilst the Sunday Times seems more positive (Pru wins backing for 10% off AIA) – but why should AIG agree to cut the price when there’s already a deal in place with penalty clauses if Prudential fail to complete on time?
Prudential still seem to be struggling with the takeover of AIA. They had a run-in with the Financial Services Authority in the UK, but that has been resolved, and now they have published the prospectus.
They claim that they can deliver $800m of revenue improvements by (amongst other things) making AIA’s agents more productive. They have figures to back this up – from last year (2009). Hands up anyone who can think of anything that might have adversely affected AIA sales last year. Yes, that’s right, AIG had come close to collapse and been rescued by the US government. So this is not a meaningful comparison, as has been pointed out:
Pi Financial Services Intelligence, a Singapore-based consultancy, said that Pru and AIA agents showed similar productivity levels before the financial crisis. Simon Drimer, Pi FSI managing director, told the Financial Times the analysis the consultancy had conducted showed there was ‘no material difference between the two companies’ agent productivity levels’.
But Prudential stood by its claims that it would deliver higher productivity. It said that based on 2009 figures, its agents were more productive compared with AIA in nine out of 10 regional markets, with AIA holding the upper hand in Thailand alone.
Yes, 2009 figures. We all know why AIA struggled in 2009, and why AIA’s agents are already becoming more productive. This trend is confirmed by the figures for the first three months of this year, but of course Prudential use them to argue that they have got a bargain, and conveniently ignore the implied productivity growth.
Barry Stowe of Prudential Asia is quoted as saying that Prudential can “restore AIA to its former greatness” by offering its agents more and better products. Yeah, right. So why is AIA much bigger and more successful than Prudential in Hong Kong and much of the rest of Asia? Why indeed does Prudential want to buy it? Perhaps Mr Stowe should think about that before commenting.
I know nothing about the “products” sold by AIA or Prudential, but I can guarantee that the management of both companies know each other’s products very well indeed, and if Prudential have a successful product then AIA can easily create something very similar. These are not physical products that can be patented, and they are not even intellectual property that can be copyrighted. So it’s highly unlikely that Prudential’s “superior products” are going to help AIA to make more money.
This brings us back to one of the fundamental problems with this deal. The prospectus states that:
…the Acquisition is primarily a growth focused transaction, although cost synergies will also be sought. Prudential intends that the Enlarged Group will use both the Prudential and AIA Group brands, maintain separate agency forces and strengthen both agency forces by the sharing of best practices.
So you have to question whether Barry Stowe is wise to make all this noise. It may be possible to “strengthen both agency forces” but not if you drive AIA agents away by telling them that Prudential is so much better than AIA (especially when the evidence suggests otherwise).
Is Prudential paying less than AIA is really worth? Because that is the only reason Prudential shareholders should approve the deal.
In amongst the usual dross there are sometimes a few words of wisdom in the SCMP letter column:
Parents sending wrong message on trains
Hong Kong parents have a very annoying habit when travelling on the train with their children.
They let their two- to three- year-olds occupy a seat in a crowded train when the child can sit in the parent’s lap and let another weary passenger rest his feet.
These "little darlings" clearly do not need the seat, judging from the way they restlessly fidget, squirm and kick, and worst of all, tramp their dirty shoes all over the seat.
I have only seen this kind of behaviour being tolerated in Hong Kong.
Parents do not seem to appreciate that this is very unhygienic. When you ask the parents to remove the child’s shoes or move the child from the seat, you either get no response or you get a look of irritation.
Presumably these are the same adults who will, in a few years’ time, be allowing their young sons and daughters to rush onto crowded trains and grab a seat in front of passengers who have queued in an orderly fashion.
Nina Cheung, Sha Tin
Very true, and only this afternoon I was travelling on the MTR and saw a small child standing on a seat, exactly as described. I fear that Hong Kong suffers from “Little Emperor” syndrome – some parents are apparently quite unaware of how selfish they are being.
You see the same thing in swimming pools: a complete lack of consideration for other users of the pool, and this absurd habit of allowing children to stand on the benches in the changing room because the floor is wet or dirty – which duly makes the benches both wet and dirty for everyone else.
Ordinary Gweilo 