While margins there are higher at the moment Mr Storer stressed that was because Sportsystem was still

While margins there are higher at the moment, Mr Storer stressed that was because Sportsystem was still investing heavily in growth.The move into sports equipment dates back to Edizione's 1989 purchase of Nordica. Last week Benetton Sportsystem filed plans to float up to a third of Rollerblade in New York in the summer. "We would like to go public with Benetton Sportsystem too," said managing director Silvano Storer. "If you are in Europe, first of all that means London."The firm is 100 per cent owned by Edizione, the Benetton family's Italian holding company, which owns the eponymous retail chain plus a host of restaurants, supermarkets and agricultural interests in Italy, as well as rugby, basketball, volleyball and Formula One motor racing teams.It operates separately from the clothing chain, but uses Benetton factories to produce knitwear for its growing Sportsystem Active arm, set up in 1994 to exploit its brands on leisure wear.Profits after tax reached L62bn (pounds 26m) in 1995 on sales of L1,354bn (pounds 568m), rises of 83 per cent and 18 per cent respectively, fuelled by dramatic growth at Rollerblade, in sportswear and its Asolo mountain and hiking boots range.That compared with sales of L2.9bn (pounds 1.2bn) for the Benetton chain. Nine times out of 10 that means making acquisitions or disposals.

And one company's disposal is of course another's acquisition.. BENETTON Sportsystem, the sportswear arm of Italy's Benetton family, is considering a multi-million pound flotation on the London Stock Exchange within the next two to three years. Formally established only in 1993, the group is now one of the world's biggest sports equipment concerns, owning a clutch of household names including Nordica ski boots, Kastle skis, Prince tennis rackets and Rollerblade skates. Sales are expected to hit $1bn (pounds 660m) in 1996. It's in everyone's interest to keep bids coming.Another factor is management ego. Company size counts for a lot and not just because it is an important determinant of top salaries. Senior managers in big companies have less and less to do with the banal business of making the actual product or service better or cheaper That is done by the heads of their operating subsidiaries Instead they feel obliged to think strategically. Every piece of independent research I've ever seen suggests that takeovers do not usually work.

Last week, Andy Dickerson of the University of Kent added to the evidence. After sifting through 1,500 completed deals worth pounds 66bn, he came to the conclusion that acquisitions reduced the rate of return of acquiring firms by 14 per cent.Why then do companies keep on mounting bids? Pressure from the City is obviously one factor. Large numbers of intelligent, plausible, charming people have a personal interest in ensuring that the deals keep coming. An awful lot of country houses, private educations and luxury cars depend on it.Moreover, the merchant banks are increasingly part of much larger integrated investment banks. Their colleagues now include fund managers, whose large shareholdings decide the fate of bids, and stockbroking analysts, whose advice is influential. Undoubtedly, however, the BT/C&W marriage - if it makes it to the altar - will be tremendously rewarding for the City, topping off a bumper year for mergers and acquisitions.Britain's love affair with takeover bids is perverse. Merchant banks like to set their fees as a percentage of deal size.

But in this case, BT and C & W will surely have haggled, both because of the sheer enormity of the deal and because it is agreed - and therefore comparatively straightforward. Even at pounds 300 an hour - the going rate for a competent City adviser - that works out at a million man-hours, which is equivalent to an army of 1,000 advisers working full time for five months. Two other regional phone companies - Bell Atlantic and Nynex Corp - have discussed a similar move, but talks are currently stalled on differences over price.The key players for the moment, though, are likely to be the three aggressive, marketing-led forces in the US long-distance market: AT&T, Sprint and MCI (in which BT holds a 20 per cent stake).AT&T, in particular, does not have a reputation for hanging about. For the deal to go through, BT would have to spin off C&W's Mercury subsidiary to satisfy UK and European regulators. Speculation has been floated that Deutsche Telekom might buy the firm for about pounds 2bn in return for allowing BT to compete against it in Germany - Europe's largest national telecoms market.BT already has telecom alliances with two utilities in Germany, while a third, Veba, owns 10 per cent of C&W.Deutsche Telekom, however, already has an international alliance, Global One, with state-owned France Telecom and Sprint of the US, and last week its French partner quickly ruled out any interest in Mercury."We think it is enough for us to be present in this market through Global One," said Bruno Janet for France Telecom.The assumption that Deutsche Telekom would welcome with open arms competition from BT - or any other operator for that matter - is clearly wide of the mark.Only last week the European Union moved to block attempts by Deutsche Telekom to slash rates for corporate networks by up to 39 per cent after fledgling rivals complained the state-owned giant wanted to kill off the competition."You'll never get into Germany or France," says Adrian Ridley-Jones, managing consultant with London-based software and telecoms consultancy Logica.Nevertheless, Logica forecasts that European telecoms monopolies could lose up to 40 per cent of their markets - and 70 per cent of their profits - in five years.It is a glittering prize US telecoms giants, in particular, are keen to carry off. Philip Healey, editor of Acquisitions Monthly, predicts it will generate pounds 300m in fees for merchant bankers, lawyers and other advisers.This surely must be an over- estimate. Power corrupts, and the absolute power bestowed on heads of institutions as unaccountable as building societies doubtless corrupts absolutely.

But in three months?If Mr Robinson is guilty of all the sins ascribed to him, the big question is how on earth such a wrong'un was promoted to such a responsible post in the first place. The responsibility lies not with the Woolwich's current chairman, Sir Brian Jenkins, who seems to have handled the affair well in the circumstances, but with Alan McLintock, the former accountant who previously chaired Woolwich and anointed Mr Robinson.Why bids go on and onANYONE looking for an explanation for the takeover boom sweeping corporate Britain need look no further than the planned marriage of BT and Cable & Wireless. He was passed as "fit and proper" to run a deposit-taking institution by the Building Societies Commission. He was well regarded by his predecessor, Donald Kirkham, who groomed him as his heir apparent. And he was named as chief executive-elect a full year before the retirement of Mr Kirkham, so certain was the board that he was the right man for the job.Somehow his sudden descent into incompetent dishonesty - as described by the Woolwich - doesn't ring entirely true: we are asked to believe that in the three months he was chief executive he turned from a paragon to a fiend. But beside the riches Mr Robinson could expect to make as boss of a future Footsie company, they didn't amount to a row of beans.And his departure has since become more puzzling still.