M&S shares surge as record dealing fuels bid speculation

SHARES IN Marks & Spencer, the beleaguered high-street retailer, surged yesterday amid feverish takeover speculation. The unprecedented volume of dealing forced the company to issue a Stock Exchange statement saying it knew of no reason for the movement in its share price.

At one point, M&S shares were trading at 317p, up 20 per cent on the previous day's close. Brokers said institutional investors were shunning the shares, which were being mopped up by "high net worth individuals".

Almost one hundred million shares change hands yesterday - 3.6 per cent of the company. The shares closed up 37.25p at 300.75p. A rumour that Tesco, which competes with Marks & Spencer in food retailing, would launch a 380p all-share bid on Monday kick-started the day's dealings.

Later, a change in the sterling exchange rate with the Swedish krona ignited speculation that Hennes & Mauritz, the Swedish womenswear group, was filling its coffers to make a cash bid. H&M shares touched a year high.

The usual suspects - Kingfisher, the Woolworths and B&Q group, and Knutsford, the takeover vehicle headed by the former Asda chairman Archie Norman - were also tipped as predators. There was also talk of an American bid.

Despite continued reports of weak trading and the continuing search for a chairman at M&S, retail investors have shown no signs of getting bored of the stock.

Marks & Spencer moved to quash speculation that it was in talks over an agreed deal. "The Board of Marks & Spencer notes the recent movement in the company's share price and confirms that it knows of no reason for this movement," it said.

None of the rumoured bidders were prepared to comment. Terry Leahy, Tesco's chief executive, was in Hungary yesterday on a routine visit to store staff. Analysts said the City would not support a bid by Tesco, which is seen as having a credible strategy based on expansion overseas and on the Internet. Tesco shares traded lower most of the day, but closed up 3p at 185.5p.

Archie Norman declined to rule out making a bid. "As far as my personal position is concerned, I have not been approached [to chair M&S]. As far as Knutsford is concerned, we are committed to acquiring businesses in the retail, leisure and property sectors. I have an agreement with Asda to be an adviser and I wouldn't do anything to embarrass the company."

Carl Henric Enhorning, financial controller at H&M, said: "Our strategy is to acquire good locations, but if you look at our history you'll see we rent and do not own. M&S owns its sites." Analysts said H&M would bring supply-chain management expertise, which M&S lacks, and could enter sale and leaseback agreements on its property.

A source close to the Knutsford team said: "They've always said it will take some time to find the right deal, but the enthusiasm for Knutsford's offering means they might be able to take on something a little bigger than planned."

The bid frenzy came the day after Peter Salsbury, Marks & Spencer's chief executive, hosted a lunch for institutional investors. The atmosphere was said to have been downbeat. Mr Salsbury, who is still looking for a chairman for the group to succeed Sir Richard Greenbury, has been meeting investors one-on-one over the last month.

Marks & Spencer is thought be experiencing particularly weak Christmas season trading. Like-for-like sale of textiles last week are thought to be down by 10 per cent year-on-year, with lingerie sales down by 20 per cent. However, the group is thought to be unlikely to embark on a campaign of heavy discounting, having limited its stock buying.

One retail analyst said: "M&S isn't going to agree to a bid. It's got a real sense of history and things haven't been bad enough long enough."

POSSIBLE RUNNERS IN THE ST MICHAEL BIDDING STAKES

Tesco

Tesco's Terry Leahy is setting his sights on beefing up his non-food portfolio, and a bid for M&S might fit the bill. Tesco and M&S have a history of co-operation on shopping centre developments, and a combination of the two would fit culturally better than other mooted tie-ups. The combined group would also have a stronger balance sheet to help international ambition. But overlaps in food retailing might run foul of the regulators.

Knutsford

Archie Norman has shot back into the limelight as one of the team of leisure, property and retail tycoons behind shell company Knutsford. He wants to do deals but is M&S too big a fish to swallow? There'd be no shortage of City cash to fund the move, but M&S's defence team would have a field day. The case would be based solely on Mr Norman's management ability, with none of the usual synergy and cross-selling talk.

Kingfisher

Sir Geoffrey Mulcahy's Kingfisher, which owns B&Q and Woolworths, turned in pounds 7.46bn of sales last year, so no wonder he's seen as the king of the retail sector. Earlier this year he was thwarted by Wal-Mart in his bid for Asda, so he's bound to be on the prowl. But, while it would make a great story, Sir Geoff already has plenty on his plate. There's B&Q's expansion to manage and trading at Woolworths is looking weak.

News
Emma Watson has become the latest target of the 4Chan nude hacking scandal
peopleThreats follows actress' speech on feminism and equality at the UN
Life and Style
food + drink
Arts and Entertainment
British actor Idris Elba is also a DJ and rapper who played Ibiza last summer
film
Life and Style
tech
PROMOTED VIDEO
News
ebooksAn unforgettable anthology of contemporary reportage
Life and Style
tech
Life and Style
Alan Turing, who was convicted of gross indecency in 1952, was granted a royal pardon last year
life
Arts and Entertainment
Sheridan Smith as Cilla Black and Ed Stoppard as her manager Brian Epstein
tvCilla Episode 2 review: Grit under the glamour in part two of biopic series starring Sheridan Smith
News
i100
Life and Style
life
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

IT Project manager - Web E-commerce

£65000 Per Annum Benefits + bonus: Clearwater People Solutions Ltd: If you are...

Trainee / Experienced Recruitment Consultants

£20000 - £25000 per annum + OTE £40,000: SThree: SThree are a global FTSE 250 ...

Trainee Recruitment Consultant - Soho

£20000 - £25000 per annum + OTE £40000: SThree: As a Recruitment Consultant, y...

Trainee Recruitment Consultants - Banking & Finance

£20000 - £25000 per annum + OTE £40,000: SThree: SThree Group have been well e...

Day In a Page

Secret politics of the weekly shop

The politics of the weekly shop

New app reveals political leanings of food companies
Beam me up, Scottie!

Beam me up, Scottie!

Celebrity Trekkies from Alex Salmond to Barack Obama
Beware Wet Paint: The ICA's latest ambitious exhibition

Beware Wet Paint

The ICA's latest ambitious exhibition
Pink Floyd have produced some of rock's greatest ever album covers

Pink Floyd have produced some of rock's greatest ever album covers

Can 'The Endless River' carry on the tradition?
Sanctuary for the suicidal

Sanctuary for the suicidal

One mother's story of how London charity Maytree helped her son with his depression
A roller-coaster tale from the 'voice of a generation'

Not That Kind of Girl:

A roller-coaster tale from 'voice of a generation' Lena Dunham
London is not bedlam or a cradle of vice. In fact it, as much as anywhere, deserves independence

London is not bedlam or a cradle of vice

In fact it, as much as anywhere, deserves independence
Vivienne Westwood 'didn’t want' relationship with Malcolm McLaren

Vivienne Westwood 'didn’t want' relationship with McLaren

Designer 'felt pressured' into going out with Sex Pistols manager
Jourdan Dunn: Model mother

Model mother

Jordan Dunn became one of the best-paid models in the world
Apple still coolest brand – despite U2 PR disaster

Apple still the coolest brand

Despite PR disaster of free U2 album
Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits