Greek crisis MARKETS BET ON BAILOUT p8 BUSINESS WITH PERSONALITY Issue 1,393 Wednesday 1 June 2011 www.cityam.com FREE New bidder CITY BACKS PLANS enters race for AssetCo ▲ EXCLUSIVE FOR NHS SHAKE-UP BY ALISON LOCK A THIRD bidder is circling troubled ▲ London fire engine supplier AssetCo in POLITICS addition to the two already named, BY ELIZABETH FOURNIER The health reforms City A.M. has learned. currently propose 9% that ‘any willing Manchester-based turnaround THE CITY has thrown its weight provider’, whether and investment house Consilia behind controversial government NHS, private or Partners is currently meeting plans to reform the NHS, according to voluntary, could now AssetCo’s shareholders as it prepares 24% provide NHS the latest results from our Voice of the % services. Do you to make a bid. City panel, run in association with 67% support these plans? Consilia enters the bidding along- PoliticsHome.com. side Bahraini fund Arcapita and Italian More than two-thirds of our panel of Yes investor Investindustrial, both of business and finance professionals which have previously submitted said they were in favour of plans to No offers for AssetCo. allow “any willing provider”, whether Don’t know The three bidders are keen to snap NHS, private or voluntary, to offer pub- Do you up AssetCo, which remains a prof- lic health services, and 65 per cent said support itable operating company, as its share they supported proposals for a regula- 9% plans for a price has slumped to 3.6p per share tor that would promote competition regulator from highs of 66p in November 2010 to promote to provide NHS services in England. competition after a series of financial setbacks and The panellists, recruited to repre- internal strife. 26% in NHS sent a cross-section of the business and % services in However, City A.M. understands that financial community in and around 65% England? AssetCo faces a claim for £180,000 in London, were responding to plans put unpaid bills from a second creditor, forward in January by health secretary Yes parts supplier Supply 999, alongside Andrew Lansley for a radical shake-up No Northern Bank’s £1.3m claim for the in how the NHS is run. More than 500 return of its overdraft. panellists responded. Don’t know Supply 999, which was part of Their views provide a stark contrast AssetCo until December 2010 when it to the backlash that the government The results of our poll show the City is overwhelmingly in favour of health secretary Andrew Lansley’s NHS reform bill Picture: REUTERS had a management buyout, joined has faced since Lansley’s Bill was Northern Bank’s creditor petition on published. Unions, NHS leaders and “GPs have gone through a long that the reforms should be significant- Cameron’s handling of the dispute. 17 May. MPs from all the major political par- training in providing first level health ly delayed to allow for further analysis. ALLISTER HEATH: P2 Arcapita’s most recent offer of 14- ties have insisted that the reforms care,” said one panellist. “It is unrea- But just eight per cent of our panel- If you wish to apply to join our panel of 21p per share on 14 March is still need to be rethought. sonable to expect them to be experts lists said they most approved of Nick business and finance professionals, and take lodged with the Takeover Panel. Under the plans, 151 primary care in health economics and the compet- Clegg’s handling of the NHS reform our weekly, 30-second email survey, please go Gareth Taylor of Investec, which trusts (PCTs) and strategic care author- ing forces of healthcare providers – we debate, with 37 per cent backing David to www.cityam.com/panel advises Arcapita, said that offer no ities will be disbanded by 2012 and should have specialists doing this.” longer applies because AssetCo issued replaced by consortia of GPs responsi- Lansley has admitted the cost of the a highly dilutive share placement later ble for commissioning services. reforms would include a £1bn redun- in March – but it remained interested Though 71 per cent of participants dancy bill from scrapping more than in making a bid. in our poll came out in favour of scrap- 24,000 NHS positions, but said that the “Arcapita remains an interested ping PCTs, just 17 per cent felt that GPs changes are projected to save more party open to dialogue with the man- should have sole responsibility for than £5bn this parliament. agement team,” he said. commissioning public health services, Downing Street was forced to deny AssetCo’s shareholders have seen with 41 per cent preferring that a over the weekend that Lansley may their stakes diluted after it issued wider range of NHS professionals also quit the cabinet over changes to the 160m 10p shares to a small group of be involved in the process. proposed reforms, as Liberal Democrat investors to raise £16m in March. A further 13 per cent said that local members of the coalition push for the One investor told City A.M. his fund councillors should also be on commis- bill to be watered down. was interested in an external bid as it sioning bodies, to give greater demo- Last month, deputy prime minister feared the alternative would be anoth- cratic accountability to the process. Nick Clegg called for clauses on private er huge placement at 1p per share or a Just 11 per cent said commissioning sector involvement and encouraging In association with Apply to join today at sale to one investor for a nominal sum, services should remain unchanged. competition to be removed, and said PoliticsHome.com www.cityam.com/panel PoliticsHome.com leaving its stake worthless. ▲ ▲ ▲ t ▲ Certified Distribution FTSE 100 5,989.99 +51.12 DOW 12,569.79 +128.21 NASDAQ 2,835.30 +38.44 £/$ 1.65 unc £/¤ 1.14 -0.01 ¤/$ 1.44 +0.01 04/04/11 - 01/05/11 is 103,899 2 News CITYA.M. 1 JUNE 2011 Why the NHS needs to be reformed NEWS | IN BRIEF Red tape cut for small business The EU has agreed to simplified accounting rules for small businesses, The NHS is very different to other ing nearly 1m people, under contract workers quit the UK. So the only way cutting the red tape for the UK’s small- health systems in other countries. For to the regional government. Various to spend much more on health over est firms. Business ministers from example, in Germany, a society which private sector contractors have the next couple of decades – and in 50 across Europe met in Brussels yesterday many would argue has a better overall improved services by providing longer years’ time spend perhaps 20-25 per and agreed accounting exemptions for health system than Britain’s (and opening times and using IT properly, cent of GDP – is to allow consumers to “micro-entities”. Business minister Ed retains universal access), just 31 per with patients in many cases now able contribute directly to the costs of Davey said it could save firms as much cent of hospitals are owned by the gov- to view up to the minute waiting healthcare, as is already the case in as £300m a year. To join the new cate- ernment. Slightly more – 32 per cent, times for hospitals and GP surgeries nations such as France or Switzerland. gory of companies created by the agree- EDITOR’S LETTER and rising – are owned by for profit over the internet, as a report from the Replacing one state-owned monop- ment, companies must not exceed two firms and 37 per cent are owned by Reform think-tank points out. oly by a privately owned one would be of three criteria: a balance sheet total of ALLISTER HEATH the not-for-profit charitable sector. The future for Britain is to move stupid. What is needed instead is €250,000 (£217,000); a net turnover of Over there, the idea that the state down the continental European route: more competition, property rights €500,000 and an average of 10 employ- FOR once, some good news for the gov- must own all hospitals is seen as a a social insurance system with mixed and an incentive for new entrants to ees during that financial year. ernment’s proposed healthcare weird idea redolent of an archaic sources of financing and a variety of provide the best services at the cheap- reforms. They may have been worldview. What matters are out- providers. There is no other way for- est cost to consumers, who need to be Bank of Ireland deal disappoints slammed in most quarters but mem- comes and ensuring the best bang for ward. As consumers become richer, empowered. The coalition’s plan has Bank of Ireland said it would impose bers of our special panel of business the taxpayer’s buck. they understandably want to spend flaws – not least the idea that GPs large losses on junior bondholders and and financial professionals love them. It is not just Germany which suc- more of their money on healthcare. should be given so much responsibili- disappointed investors by withholding Over 500 took part in our latest survey cessfully involves the private sector to The problem is that the government is ty for commissioning spending – but details on the possibility of a more (in partnership with PoliticsHome), as a much greater extent than we do to out of money: the budget deficit also contains many good ideas. It is attractive deal for holders willing to we report on page 1, and two-thirds ensure that the whole population remains vast and even its attempt to time for radical thinking on how to take shares instead.