Grimsey's rescue mission

BY the standards of Safeway, the skirmish over the future of convenience chain Londis is no more than a gnat's bite.

But the contest has galvanised the financial community because of the audacity of the management, which planned to fill its own boots at the expense of its long tail of shopkeepers, many of them Asian entrepreneurs.

Enter Bill Grimsey, veteran of the turnaround at DIY group Wickes, and now trying to work the same magic at the Big Food Group. His proposal to Londis is worth a fraction more than the earlier offer from Musgrave, but the distribution of payouts will be much fairer.

Londis directors, headed by Graham White, already have enriched themselves by £7.1m under new service contracts recently signed.

If the Musgrave deal were successful they would scoop more than half of the £40m offer, leaving the rest to be spread among the small shopkeepers. Under the Grimsey deal the bosses would get just £600,000. But Grimsey's offer is not entirely straightforward since it will mean untangling some complex contracts already in place. Clearly, advisers led by UBS believe this can be done.

As for the Big Food Group, it seems to be back in the land of the living. We have had differences with Grimsey over the pain he inflicted on future defined benefit pensioners, as part of the effort to restore the group's finances. This time he is acting in an ethical way and at the same time hopes to build on his Premier chain of Booker food outlets.

Londis shopkeepers should give him the chance.

Brown's battles

IT is impossible to pick a real winner in the current debate about the public finances. The City and now MPs on the Treasury Select Committee argue that the £10bn of extra borrowing in the current 2003-04 financial year is a result of shifts in the tax base.

The Chancellor sticks to his guns (so to speak) and blames the extra shortfall, bringing total borrowing to £37bn, on 'the amount of money we have to spend in Iraq' and 'slower growth in average earnings'.

Brown's credibility remains intact on economic growth as a result of some intuitive forecasts. But the drift on public borrowing does cause concern.

By sheer coincidence the new borrowing figures at £5.5bn in November are better than last year and below market expectations. So there is a glimmer of hope that there could be an undershoot this year.

Most forecasters already are turning to 2004-05. Some economists believe that instead of borrowing being on a falling trajectory, as the overall economy improves, it could rise to £40bn next year - or at best will be flat at about £35.6bn.

The Chancellor argues this is unimportant and points to the bigger deficits in almost every other Western industrial economy from the United States, to Germany and Japan.

Be that as it may, at some point before the global upturn is over Brown - on current forecasts by the independents - will have to dig deeper into our pockets.

That is, unless his luck holds and he proves the experts wrong again.

Goldman's gloss

GOLDMAN Sachs used to be viewed as just another hard-nosed New York trading partnership.

It is still that, with the company doing a clever switch into bonds and currencies in a year when equities recovered, but M&A and new issues were still thin.

But it also has become a school for the great and the good. Here in Britain, former chief economist Gavyn Davies is now chairman of the BBC, where he is hard at work putting reforms in place before the Hutton report.

In the US, the firm has supplied one excellent Treasury Secretary Robert Rubin, responsible for President Clinton's era of balanced budgets and low bond yields, a liberal Senator in the shape of Joe Corzine and now it is claiming the chief executive's role at the New York Stock Exchange.

Departing Goldmans chief executive John Thain is taking on one of the most difficult jobs in American finance.

The NYSE has long been a barony of Wall Street bigwigs, not afraid to feather their own nests. Former chief Dick Grasso was forced out for his over-generous and secret pay, pensions and bonus arrangements.

It will be left to Thain to implement reforms, bringing more transparency to the NYSE's internal affairs and cleaning up its governance.

The most important decision he will have to take is whether to modernise and begin the conversion of the Big Board from floor to electronic trading.

It will have to happen.