Green lines up Stevenson to lend weight to bid for Marks & Spencer

Retail billionaire putting final touches to offer for High Street icon
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The Independent Online

Philip Green, the retail entrepreneur preparing a £10bn offer for Marks & Spencer, is trying to bring Lord Stevenson, the chairman of HBOS and Pearson, on board to lend City credibility to his bid.

Philip Green, the retail entrepreneur preparing a £10bn offer for Marks & Spencer, is trying to bring Lord Stevenson, the chairman of HBOS and Pearson, on board to lend City credibility to his bid.

Mr Green, the owner of BhS and Arcadia, is looking for a heavyweight figure to chair his bid vehicle, Revival Acquisitions. The possibility of approaching Lord Stevenson for that role has been discounted because it would present several conflicts of interest. Not only is he already chairman of two FTSE100 companies, but HBOS is one of the banks lined up to provide financing for Mr Green's assault on M&S.

A more likely option is for Lord Stevenson to join Mr Green's team in some other capacity - not as chairman but perhaps as a director or adviser.

Mr Green's bid will be in the form of cash and shares. Should it succeed, he plans to seek a stock market listing for Revival, which would almost certainly become a FTSE100 stock.

A spokesman for Mr Green refused to comment yesterday on the search for a chairman and whether Lord Stevenson had been approached in some capacity.

Mr Green said he had finance for the offer "virtually in place", although it is expected to be the latter part of next week before he makes a formal offer to the M&S board. He also said he had the "bones" of a management team.

The flamboyant entrepreneur, who has become a billionaire through his astute takeovers of well-known high street names, intends to ring fence M&S from his privately owned BhS and Arcadia, which owns a range of fashion shops from Burton's to Dorothy Perkins.

This is designed to ease potential fears among among City institutions about holding shares in a publicly listed company which is controlled by someone with a vast privately owned empire.

But analysts said Mr Green was likely to encounter other difficulties. One is a possible Competition Commission inquiry, given that Mr Green would emerge, on some estimates, with a 25 per cent share of the UK clothing market.

Another is the need to carry out due diligence on M&S, which he can only do with the consent of the M&S board.

He could launch a hostile bid, but that would be highly risky given the highly leveraged nature of the offer Mr Green and his advisers are assembling.

Mr Green is being advised by Merrill Lynch and Goldman Sachs, while Royal Bank of Scotland and Barclays Capital have been lined up to provide finance alongside HBOS.

Shares in M&S climbed a further 4 per cent to 359.5p yesterday, valuing the group at £9.2bn. Some analysts believe Mr Green will have to offer 400p a share to stand a chance of victory.

Details of how the bid will be financed remain sketchy, although Mr Green has made it clear he will have control of M&S should his offer succeed. There is speculation that Mr Green may seek to raise anywhere between £2.5bn and £5bn of equity, with the rest financed by debt. He has indicated he will commit more than £600m of his own personal fortune to the bid.

Mr Green was forced to abandon plans for an earlier bid for M&S in 1999 when details of his wife's dealings in M&S shares became public. Since then, however, his acquisitions of BhS and Arcadia have raised his stock and his credibility in the City.

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