Business view: A bit of a flap around a former favourite

What are we to make of the dramatic spike in the price of Marks and Spencer on Friday? A billion quid was added to the value of the favourite retailer of the high street amid frenzied speculation about its future.

M&S said that it knew of no reason for the price movement, and I am inclined to believe it. But there are flurries of rumours.

The first I can kill off immediately. Tesco is not about to launch a hostile bid. Given that the Competition Commission is crawling all over supermarket pricing it would be monumental stupidity on the part of Terry Leahy to make a bid in the UK. Anyway, he is opening the equivalent of a William Morrison a year, on the continent, so he can see where his growth is coming from.

Kingfisher is also an unlikely bidder, though it might like to buy M&S. For Knutsford, there is not enough opportunity to finesse M&S's property to make it attractive. The other rumoured bidder - perhaps the one I am most inclined to believe - is Royal Ahold. But then again this Dutch group is rumoured to be a bidder for anything (remember, indeed, the Sainsbury speculation last year).

I suspect, though, that if Ahold (or KKR or Pinault Printemps Redout) did bid this could tempt Tesco or Kingfisher into a rival offer to protect their home territory. However, a NatWest-type bidding for M&S appears a long way away.

The other rumour is that M&S is about to appoint a new chairman, so ending half a year of speculation. However, I do not think we will hear any news of that this side of Christmas, and I cannot imagine an appointment so good it would add 14 per cent to the share price. The best candidate, Archie Norman, would lead to a fall in the share price as it would take away bid speculation. So, I am afraid that the only conclusion I can come to is that M&S is about to reinvent itself as an internet company, appointing a 25-year-old as the chief executive elect. anyone?

Deals in the air

Maybe it's the annual spirit of goodwill, but I do detect a change in the air on the two massive contested takeover bids that are already on the blocks - Vodafone/Mannesmann, and the battle for NatWest.

Having concluded his largely fruitless tour of the financial capitals of the world, Klaus Esser appears to be saying "not at this price" rather than "not at any price" for the Vodafone offer. Chris Gent has said he will not increase the offer. But I sniff a deal. I suspect that if Vodafone agreed to a more Germanic corporate structure, with an advisory board, and agreed to pay a large cash dividend to Mannesmann shareholders, an agreement could not be too far away.

At NatWest, Sir David Rowland appears to have given up the ghost. It looks as if he will strike a deal either with Bank of Scotland or with Royal Bank. And, tomorrow, John Bridgeman at the OFT will pass his report to Stephen Byers, telling the Trade Secretary to approve the bid. Mr Byers will no doubt rubber-stamp this well before Christmas, so clearing the way for an improved Royal Bank offer, which no doubt will be accepted by NatWest.

Credit from the fearless

What is it about trade finance companies? Investors in Versailles Group have been buying - as it were - the story that Carl Cushnie has been promoting without ever understanding what the company is all about. Mr Cushnie, of course, has no real experience of financial markets. He was an engineer, then he ran a computer distribution company which specialised in ICL, then somehow he found himself in the world of trade finance, heading up Versailles (the name, by the way, was chosen supposedly just because it implied trust).

However, the writing as on the wall long before the Department of Trade and Industry started querying Versailles's accounting practices. By all accounts, the company thrives on referrals from the banks - notably our friends, Bank of Scotland - which themselves are hardly likely to pass on business if they think there is good money to be made. The fact is that Versailles extended credit in places where others feared to tread.

Not that this is a bad business, look at the success of consumer credit group, Provident Financial. But experience shows that this can be a tricky area to operate. Those with good memories might recall the Icarus-like flight of Associated Henriques, a company rather similar to Versailles, which was run by two South African emigres and which collapsed in the early 1990s. Then there is the topsy turvey ride of London Forfaiting, whose dabbles in eastern European financing and associated write-offs have actually pushed to group to the precipice of solvency.

The fact is that the City does not understand these companies and how they make their pots of money. And if the experts are befuddled, what chance, you wonder, do ordinary investors have?


Start your day with The Independent, sign up for daily news emails
ebooksAn introduction to the ground rules of British democracy
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Recruitment Genius: Sales Assistant / Buyer

£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...

Recruitment Genius: Customer Service Advisor

£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...

SThree: Trainee Recruitment Consultant

£20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....

Recruitment Genius: Compliance Manager

£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...

Day In a Page

Greece debt crisis: What happened to democracy when it’s a case of 'Vote Yes or else'?

'The economic collapse has happened. What is at risk now is democracy...'

If it doesn’t work in Europe, how is it supposed to work in India or the Middle East, asks Robert Fisk
The science of swearing: What lies behind the use of four-letter words?

The science of swearing

What lies behind the use of four-letter words?
The Real Stories of Migrant Britain: Clive fled from Zimbabwe - now it won't have him back

The Real Stories of Migrant Britain

Clive fled from Zimbabwe - now it won’t have him back
Africa on the menu: Three foodie friends want to popularise dishes from the continent

Africa on the menu

Three foodie friends want to popularise dishes from the hot new continent
Donna Karan is stepping down after 30 years - so who will fill the DKNY creator's boots?

Who will fill Donna Karan's boots?

The designer is stepping down as Chief Designer of DKNY after 30 years. Alexander Fury looks back at the career of 'America's Chanel'
10 best statement lightbulbs

10 best statement lightbulbs

Dare to bare with some out-of-the-ordinary illumination
Wimbledon 2015: Heather Watson - 'I had Serena's poster on my wall – now I'm playing her'

Heather Watson: 'I had Serena's poster on my wall – now I'm playing her'

Briton pumped up for dream meeting with world No 1
Wimbledon 2015: Nick Bollettieri - It's time for big John Isner to produce the goods to go with his thumping serve

Nick Bollettieri's Wimbledon Files

It's time for big John Isner to produce the goods to go with his thumping serve
Dustin Brown: Who is the tennis player who knocked Rafael Nadal out of Wimbeldon 2015?

Dustin Brown

Who is the German player that knocked Nadal out of Wimbeldon 2015?
Ashes 2015: Damien Martyn - 'England are fired up again, just like in 2005...'

Damien Martyn: 'England are fired up again, just like in 2005...'

Australian veteran of that Ashes series, believes the hosts' may become unstoppable if they win the first Test
Tour de France 2015: Twins Simon and Adam Yates have a mountain to climb during Tour of duty

Twins have a mountain to climb during Tour of duty

Yates brothers will target the steepest sections in bid to win a stage in France
John Palmer: 'Goldfinger' of British crime was murdered, say police

Murder of the Brink’s-MAT mastermind

'Goldfinger' of British crime's life ended in a blaze of bullets, say police
Forget little green men - aliens will look like humans, says Cambridge University evolution expert

Forget little green men

Leading evolutionary biologist says aliens will look like humans
The Real Stories of Migrant Britain: An Algerian scientist adjusts to life working in a kebab shop

The Real Stories of Migrant Britain

An Algerian scientist struggles to adjust to her new life working in a Scottish kebab shop
Bodyworlds museum: Dr Gunther von Hagens has battled legal threats, Parkinson's disease, and the threat of bankruptcy

Dying dream of Doctor Death

Dr Gunther von Hagens has battled legal threats, Parkinson's disease, and the threat of bankruptcy