City pockets a £50m bonanza as Green licks his wounds over Marks & Spencer

'The way he behaves is why people don't want to work with him'. Abigail Townsend reports on the aftermath of the retail battle

City advisers are expected to share a mammoth £50m payout following Philip Green's failed attempt to win control of Marks & Spencer.

City advisers are expected to share a mammoth £50m payout following Philip Green's failed attempt to win control of Marks & Spencer.

When asked how much he would be out of pocket, Mr Green said he "hadn't been bothered to find out". However, insiders believe fees paid to advisers, including Goldman Sachs and Merrill Lynch, would be around £10m.

Although the wrangle lasted eight weeks, Mr Green's team had been working on the bid since January. Said one insider: "He has been very mean and very prudent and he will have got quite a lot of work done on a 'no win, no fee' basis. But around £10m sounds reasonable to me. For everyone who loses in the City, someone wins."

Advisers to M&S, however, would have scooped considerably more. Although they spent less time on the deal, success fees were built in. Two deals were also announced, the purchase of the Per Una contract from George Davies for £125m and the sale of the personal finance unit to HSBC for £762m. One well-placed source confirmed the fees would come in at around £40m.

As well as counting its money, the City is now left trying to establish where it went wrong for the Monaco-based tycoon. He withdrew his £9.1bn, or 400p per share, approach on Wednesday, eight weeks after making his interest known at the end of May.

Mr Green's camp blame the M&S board's refusal to open the books, while Mr Green said he could not have afforded to go hostile. He also added that when Brandes, M&S's largest shareholder with 11.7 per cent of the stock, agreed to support a bid at 400p, it was on condition that M&S's board recommended the offer.

Mr Green wanted M&S to agree to 14 conditions. These included details of the Per Una contract, the value of the property portfolio and information on the pension deficit. M&S refused to bow to any of them.

"I don't think the board could reasonably let him look at the books," said Paul Mumford, a senior fund manager at Cavendish Asset Management, a small investor in M&S: "Had he walked away, he would have had privileged information, trade information. As it is, straight away he's said there's going to be a price war."

Mr Mumford believes this was another area which M&S was able to turn to its advantage, as the points were instead addressed by chief executive Stuart Rose - through such measures as buying the Per Una contract and revaluing the property portfolio. Mr Rose then announced his findings, along with a £2.3bn share buyback and a strategy for recovery, last Monday, at which point Mr Green is understood to have accepted he had lost the battle.

Others point to Mr Green's pugnacious personality as a factor. One analyst commented: "Beneath all that ranting and raving there was some logic. But he just cannot see that the way he behaves is why people don't want to work with him."

The battle was marked by a series of clashes between Mr Green and Mr Rose. Examples included an altercation outside M&S's head office, Data Protection Act notices being fired off, the delivery of prostitute calling cards, and a Financial Services Authority probe.

Although straddling both sides, the incidents added to Mr Green's infamous reputation. "It didn't help, put it that way," commented another analyst. "He still managed to get a significant level of support, but I think if he had presented it differently, quite a few more shareholders would have been willing to publicly back him."

Yet most agree the decisive move was the removal of chief executive Roger Holmes in favour of Mr Rose. Simon Proctor, a retail analyst at broker Charles Stanley, said: "The critical point came when the M&S board changed the leadership. The game totally changed."

Mr Green's approach and the subsequent defence gave M&S "a very good kick up the pants", said one senior banker. Now, however, Mr Rose must make his plans to turn M&S round work.

Commented one friend of Mr Green: "He's always going to be judged against the £4. Stuart's a great retailer but it's a big job, takes a lot of time and it's pretty tough out there.

"As for Philip, Philip's Philip. There's degrees of pissed off - it's not as if he hasn't got a bit of an empire already. He'll dwell on it for a couple of days and then go and do something else. The pressure is now on Stuart."

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