Goldman arches

21 Apr 2006 By Hugo Dixon

The backlash over its aggressive approach to UK companies and its willingness to back multiple horses in the same industry is taking a toll. Paulson’s edict to cool it may provide a reprieve. But Goldman will find it increasingly hard to pursue its own and clients’ interests.

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Hank Paulson, Goldman Sachs' chairman and chief executive, told the bank's management committee that bankers needed to think carefully before engaging as a principal in approaches to public companies that could be portrayed as hostile.

This followed four highprofile approaches to UK public companies: ITV, BAA, ABP and Mitchells & Butler.

Goldman has a longstanding policy of not taking bids as a principal directly to shareholders against the wishes of a company's board. It is, though, prepared to make unsolicited approaches even if these are viewed as hostile by the board. It now, though, wants its bankers to think carefully before doing so.

Goldman has decided not to pursue its approach to M&B after its partners decided they might go direct to shareholders. It also withdrew its ITV approach after the board rejected its approach. But it has not withdrawn from either BAA or ABP, hoping it might still be possible to gain a recommendation.

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