Wednesday, August 23, 2006

Odds and Ends

I've been recovering from a cold, and plowing through the papers over the last couple of days and have accumulated several interesting articles to post.

As a Coles Myer shareholder, I've been watching the latest news (SMH article, for example) with great interest. The rumoured takeover by KKR has even made the Wall Street Journal (subscription required). As I write this, the Coles board has not announced whether it will co-operate with the KKR bid. However, Coles Myer has already split off the Myer department store chain, leaving the Australian Target and K-Mart chains (yes, both are owned by Coles Myer), Officeworks, liquor stores and the supermarkets. Coles' board released their own strategy statement on 31 July, which saw the share price plummet in early August. The takeover rumour, thankfully, has more than made up that decline. So, it appears "the market" was not overly impressed by the strategy statement, and thinks KKR will bid more than the roughly $10.70 price the stock hit on 1 August. The stock is currently hovering around $13.25. But, will the board (and the shareholders) be content to have KKR reap the profits from splitting the business up? The Wall Street Journal recently had an article about VNU (subscription required), a recent KKR target where shareholders demanded (and got) a larger premium than KKR's initial bid. Perhaps the takeover bid will serve as a message to the board that their 31 July strategy was not bold enough.

I should also point out an article from today's SMH about legendary finance academic Burton Malkiel. Apparently, Prof Malkiel is currently in Australia (unfortunately, he doesn't appear to be anywhere near Queensland), talking about investment, index funds, and beating the market (or not).

Finally, I'd like to mention a piece from Online Opinion about education as a consumer good. It talks about a legal settlement between a secondary school in Melbourne and the parents of a student who did not learn to read properly.

Those in the know have warned that this case could result in an education system burdened by increased litigation by parents against schools, with schools having to be very careful about how they promote their standard of teaching to parents of future students. Not only does the case highlight that education is becoming an area of focus in an increasingly litigious society, but that on a broader level education - at whatever level - has become little more than a product for sale in the market for knowledge and training.

While the case at hand involved a secondary school, I can easily see it applied to tertiary institutions; especially in the case of full fee paying students. Some students already seem to think that attendance should guarantee a passing grade. While I believe that certain pedagogical standards must be met, students must participate in their own education. Those who are not willing to work toward understanding and learning should not be handed a degree.


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