Outlook: Sears/Green

IT ALWAYS costs pounds 1 to buy a Sears share, as the old saw used to run in the City. Well, now you can pick them up for the equivalent of 34p, allowing for last year's share consolidation, and that is just what the Barclay brothers and Philip Green plan to do.

So disillusioned is Sears' biggest shareholder, Philips & Drew, with the present management that it has irrevocably agreed to sell out for cash at 340p, even if another bidder comes along offering an extra 19p. Not so much a case of a bird in the hand being worth two in the bush, as of anything being better than the dead parrot Sir Bob Reid is presiding over.

The offer price may be 120p south of Sears' net asset value, but Mr Green and the Barclays can hardly be accused of being opportunist in their timing. Mr Green has been telegraphing his bid intentions for the last six weeks and, even so, the offer price is still a 10 per cent premium to Sears closing price on Wednesday night.

In these circumstances, any bid defence looks like being a non starter. Indeed, one of Sir Bob's ramparts has already been knocked flat since P&D agreed to pledge its 22 per cent stake to the Barclays after hearing of Sears' plan to hand back 141p to shareholders through the sale of its store card business to the French.

What price Sir Bob being able to assemble a sum of the parts argument that persuades remaining shareholders to stick with the board?The chances of a white knight look less than even as do Sears' prospects of selling the mail order business Freemans for enough to make the numbers stack up.

Sears could argue that the offer price takes no account of the book value of the property in its various high street retailing chains. It might also argue that Mr Green's own retail empire, Amber Day, was nothing to write home about, though since Mr Green's offer is in cash, this hardly matters. But the killer counter-argument is that Sears has simply failed to deliver once too often.