Ann: DWS not to lodge Counter Proposal for SMS acquisition, page-7

I've gained a little bit of new respect for the DWS board in having the internal fortitude to walk away from this situation, which is likely to have ended up being somewhat toxic for DWS shareholders down the track.

The problem with these sorts of "people" businesses, is that they have very little natural organic growth and their earnings tend to be quite cyclical, subject to the vagaries of the cyclical demand for their services.

So the only way you can really grow over time and from one cycle to the next is by acquiring other similar businesses. Which is quite risky; firstly, because acquisitions of any kind are naturally risky to begin with and, specifically, because when you buy a professional services business, the "assets" i.e., the people are professionally mobile and can simply one day all get up and walk out the door and all you are then left with is a whole lot of goodwill that you need to write down.

So kudos to the directors for resisting the temptation to behave like drunken sailors in this situation.

(Although why they ever became embroiled with a basket case, busted up business like SMX in the first case is a matter for a separate debate. Because I strongly suspect that it would have become evident that they had acquired a nice, yellow lemon. So let's say the DWS management and the company's shareholders were lucky in that someone else did come along behaving like a drunken sailor waving fists full of dollars around. Because I think a whole lot of tears that would have been shed, will now not be.)