Woolworths really could have been saved
Ive finally gotten around to reading the book In Sam We Trust about the Wal-Mart founder Sam Walton and in my version the opening passages focus on the takeover of Asda by Wal-Mart exactly 10 years ago. By Glynn Davis, City editorIt recalls a 7am phone call from Asda chief executive Allan Leighton to Sir Geoffrey Mulcahy his opposite number at Kingfisher, which had pretty much agreed a merger with Asda, to notify him that the deal was off and that the company had instead agreed to be acquired by the US retailing giant.
This was a real kick in the teeth for Mulcahy and for many years it put Kingfisher on the back foot with much destruction of shareholder value. It also led to the hiving off of Woolworths that arguably resulted in its ultimate demise having been saddled with too much debt and problematic leases - leading to more destruction of value for investors and many job losses. And who knows what other ramifications have resulted.
Such problems might have all been averted if one small action had taken place. It involved the appointment of Allan Leighton as deputy chief executive. Mulcahy was reluctant to agree to this and it led Asda to pursue a deal with Wal-Mart even though it had the Kingfisher merger already in the bag. The rest as they say is history.
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