Quotes of the Day

The battle to acquire Britain's Safeway supermarket chain is strictly small potatoes by conventional standards. But to deal-starved investment bankers, it's a feast — although the main course has yet to be served. Six potential bidders have emerged to date, trailing 11 investment banks, but so far only one offer is on the table, an unappetizing €4.4 billion stock offer from supermarketer William Morrison that Safeway no longer supports. Three bigger retailing rivals — Tesco, Sainsbury and Wal-Mart — are likely to encounter serious anti-trust obstacles if they make bids, bankers say, and the two financial bidders, KKR and Philip Green, would load the retailer up with debt. With the volume of merger activity in Europe down 62% from 2000 and off 20% from 2001, according to Thomson Financial, bankers are elbowing for a place at the Safeway table. "There's a perception at many banks that if things don't pick up substantially there'll need to be more downsizing," says Geoffrey Nicholson, of Mercer Management Consulting. Merrill Lynch last week stepped down as Tesco's broker because it's advising Green. WestLB Panmure continues as Safeway's broker even though its lending division is working with Green, while Credit Suisse First Boston ditched a 10-year relationship with Safeway to advise KKR. That's risky, since only the winner's bankers, and Safeway's, are likely to be paid.

NEWSPAPERS
Good Luck. Go to hell
Peter Goldmark didn't just burn his bridges when forced from his job as CEO of the Paris-based International Herald Tribune — he blew them to smithereens. In a goodbye letter to colleagues he torched his former bosses at the New York Times for ending the IHT as an "independent newspaper, with its own voice and its own international outlook." Goldmark admitted he was breaking the corporate code, under which outgoing CEOs shut up and take the money. "Believe me, I will pay dearly for this, both financially and in other coin," he wrote. But he could not abide the Times decision to manage the paper from the U.S., derisively calling the new IHT a "global New York Times." But wasn't that the plan? Goldmark was the third top manager to leave since the Times wrested the paper from former partner Washington Post last month. Independent or not — critics say it wasn't great at delivering a unique perspective anyway — the IHT has been unprofitable since 1999. The advertising slump that hit almost all publications forced Goldmark to make painful job cuts before he got the ax himself. Even Goldmark concedes that the old structure was unsustainable, and while readers looking for a truly independent paper may share his angst, the Times' move is logical in a tough business climate. And the paper will need all the help it can get: last Friday the jilted Washington Post published its first articles in a new partnership with the Wall Street Journal Europe. Looks like there is more than one way to burn a bridge.

EUROBLUES
Vive le Déficit
With nary a whimper, Germany joined 14 other E.U. members to approve disciplinary measures for its own violation of the Stability and Growth Pact, which limits deficits to 3% of GDP. But when the E.U. warned France for an expected 2.9% deficit this year, Finance Minister Francis Mer said au contraire, "we will climb the mountain at our own rhythm." Mer was rebuked by E.U. Commissioner Pedro Solbes, and by week's end, the French resistance seemed to be cracking. Mer vowed to use reserve funds to keep deficits down. But unless France reins in its tax-cut plans or its spending, the E.U. could eventually help it up the mountain with another push — in the form of a hefty fine.

INDICATORS
Your Not-So-Secret Account
After more than a decade of haggling, E.U. governments agreed to share information on nonresidents' bank accounts to help fight tax evasion. But the deal included a big loophole for Luxembourg, Belgium and Austria, which will keep their banking secrecy, levying a 35% tax on savings in return.

The Party's Over
Tupperware is putting a lid on the parties used to sell its wares in British homes for the last 42 years. The company says ready-made meals and hectic lifestyles have made its strategy outmoded. Tupperware is disbanding its nearly 1,700-strong direct-sales force.

American's Hard Landing
American Airlines reported a loss of $3.5 billion for 2002 — the biggest in aviation history. CEO Don Carty called the losses unsustainable. No kidding. But high fuel prices and war fears threaten to make the 2003 first quarter just as ugly.

All Fall Down
Just when markets seem to have found their bottom, they manage to find another: Britain's FTSE 100 hit a record 10-day losing streak, closing at a seven-year low of 3,603.

THE BOTTOM LINE
"In today's world only 13.9635% of actuaries are really like that!
JEREMY GOFORD,
president of Britain's Institute of Actuaries, protesting the depiction of math-obsessed actuaries in the Jack Nicholson film About Schmidt

• BLAINE GRETEMAN
• Making a meal of merger deal may leave a bad aftertaste in the market