Business View: M&S hasn't seen the last of the Monaco marauder

Stuart Rose's timeframe is tight. The annual results next May could be his Waterloo
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The Independent Online

So it's over. Just as Philip Green caught Marks & Spencer on the hop when he announced his intention to bid (the then chief executive, Roger Holmes, was just about to phone me, of all people), so he surprised them when he gave up the fight. M&S directors were in a board meeting, deciding whether to allow Mr Green more access to their books (the answer would surely have been no), when the volcanic entrepreneur pulled up his stumps. And in typical Green fashion, he didn't call the M&S chairman to tell him, he put out the announcement and one of M&S's advisers learnt about it when an email popped up on his hand-held computer.

So it's over. Just as Philip Green caught Marks & Spencer on the hop when he announced his intention to bid (the then chief executive, Roger Holmes, was just about to phone me, of all people), so he surprised them when he gave up the fight. M&S directors were in a board meeting, deciding whether to allow Mr Green more access to their books (the answer would surely have been no), when the volcanic entrepreneur pulled up his stumps. And in typical Green fashion, he didn't call the M&S chairman to tell him, he put out the announcement and one of M&S's advisers learnt about it when an email popped up on his hand-held computer.

Speaking to me as he returned to Monaco to lick his wounds, Mr Green was his typically vitriolic self. He called Paul Myners, the M&S chairman, an "anti-Semitic left-winger". I countered that I'd known Mr Myners for more than a decade, and while his politics might favour Labour, he certainly did not hate Jews. But Mr Green howled that Mr Myners had said he wanted to prevent him becoming the richest man in Britain, so he must be anti-Semitic.

While that argument was farcical, Mr Green gave other reasons why his tilt at M&S had, he claimed, been unfairly thwarted. And these did hit closer to home.

He said that his success in the past had worked against him. His purchases of Sears and Bhs were demonstrable bargains (he also included Arcadia in this argument, but I have yet to be convinced that he has made the Top Shop-to-Burtons group worth a great deal more than he paid). So, he said, if he was willing to pay 400p for M&S, the City would think it was worth 900p. Allowing for some inflation of the numbers, I think he has a point. But if Stuart Rose is not able to weave his magic at M&S, the shareholders will be happy to sell out to Mr Green if he bids again.

Mr Green's other kvetch is about the pension fund trustees. They refused to meet him, they would not give him any information about the fund position, and when they did release information it was biased against Mr Green and leaked at 1.30am.

Again, the detail is a little awry - the leak was at midnight (I remember the call all too well). And the pension fund trustees' views, while rather tough on Mr Green in saying he could have to put up to £1.8bn into the fund to shore it up, were totally defensible. The trustees' only interest should be that the pensions can be paid, and if that means making it hard for a highly leveraged bid to go through, then fair enough.

But what was wrong was that David Norgrove - a former director of M&S, remember, as well as chairman of the trustees - wasn't willing to meet with Mr Green or his advisers, to discuss the reasoning behind the fund's calculations. Mr Green calls this "shabby". I'd call it ill-advised. Whatever, it is now history.

Or is it? Because while Mr Green is currently saying he doesn't think he'll bid again, it's quite easy to see a situation where he might. He has shown he can raise over £12bn of finance for a takeover bid, and has clearly won the support of Goldman Sachs and HBOS. And nothing else on the high street has the same mix of potential and kudos as M&S.

Stuart Rose is clearly a talent and is putting together a good team at M&S. But his timeframe is tight. He can do little about this Christmas, which on the clothing side is already "bought", so we are looking to food, to the spring collections, and to taking costs out of the supply chain to deliver for him. The results next May, which did for Roger Holmes this May, could be Stuart's Waterloo.

M&S's largest shareholder, Brandes, has shown it is willing to sell out if 400p is on the table (even though 400p was in reality never on the table from Mr Green). The Monaco mogul will hang over M&S like a foul-mouthed sword of Damocles. But if M&S shares are languishing at 300p next May, the board of M&S will have little choice but to talk turkey with him.

j.nisse@independent.co.uk

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