Green may quit M&S battle as City rejects 'stub' equity plan

Philip Green may drop his £8bn pursuit of Marks & Spencer after institutional investors rejected his plan for an equity "stub" as part of his conditional bid.

Philip Green may drop his £8bn pursuit of Marks & Spencer after institutional investors rejected his plan for an equity "stub" as part of his conditional bid.

The Monaco-based owner of Bhs and Arcadia is this weekend considering his position and is expected to make a further statement this week. He is expected either to make an all-cash offer, valuing M&S at £9bn, or walk away.

Four years ago, he abandoned his bid approach for M&S after it appointed Luc Vandevelde as chairman. This time, the appointment, announced on Monday, of Stuart Rose as chief executive has strengthened M&S' defence.

On Thursday, Mr Green made an indicative offer that had a cash element of between 290p and 310p plus a 25 per cent equity interest in the business then owning M&S. This has been valued at as little as 23p a share, though Mr Green's camp say it could be worth around 90p.

M&S shares closed on Friday at 357.5p, valuing the retail group at £8.1bn.

Institutional investors indicated they were not keen on the stub equity and Mr Green is now reconsidering the structure of the bid. He has £9bn of committed funds from banks and has the ability to make an all-cash offer of 400p a share for M&S.

Mr Green is understood to be concerned that such a bid would put too much financial strain on the company that ended up owning M&S.

Mr Rose said he expected Mr Green to come back with an increased offer. "He is a determined man," said the M&S chief executive.

M&S is expected to unveil a £1bn increase in the value of its property as a key plank of its defence. The revaluation could pave the way for a £3.5bn sale of the property, with cash being returned to shareholders.

Mr Rose last week ordered surveying firm DTZ to carry out a full revaluation of M&S's property portfolio.

DTZ refused to comment. However, a well-placed source said that a property sale could be on the agenda and that the cash raised could be returned to shareholders.

"We will be looking at all the assets in the business, but there is no real rush to do anything," Mr Rose said.

M&S owns property in more than 300 sites across the UK, in what is regarded as some of the most prime locations. However, the company hasn't conducted a full, external revaluation of its estate since 1988, according to an M&S spokeswoman.

M&S's estate has a book value of £2.15bn and analysts now believe that it could be worth between £3bn and £3.5bn.

The bidder bit: when the retail raider lost his cool with Snow on TV

John Snow, Channel 4 News: Surely you have to make a firm bid?

Philip Green: Whoa, hold on a second. As far as I'm concerned on the basis I have five international banks that have confirmed committed finance and committed means its on call this afternoon OK? As far as I'm concerned I've evidenced my money, OK.

JS: So you have made a bid?

PG: I've evidenced I have financial capability so I'm a bona fide purchaser. That's what evidencing your money means. There are three questions I've asked that could have a massive variation to value.

JS: But until yesterday you retained Freshfields who know the answers to those questions?

PG: I don't know if they do or they don't know about them. They don't know about the pension fund.

JS: It's hard to believe that you've been working on a bid with Freshfields...

PG: Could you stop your camera? I think we should stop. (Interview is terminated.)

Suggested Topics
Start your day with The Independent, sign up for daily news emails
ebooks
ebooksA special investigation by Andy McSmith
  • Get to the point
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

Recruitment Genius: Retirement Coordinator - Financial Services

Negotiable: Recruitment Genius: To provide a prompt, friendly and efficient se...

Recruitment Genius: Annuities / Pensions Administrator

Negotiable: Recruitment Genius: You will be the first point of contact for all...

Ashdown Group: HR, Payroll & Benefits Officer - Altrincham - up to £24,000.

£18000 - £24000 per annum + benefits: Ashdown Group: HR, Payroll & Benefits Of...

Ashdown Group: Learning and Development Programme Manager

£35000 - £38000 per annum + benefits : Ashdown Group: A highly successful, int...

Day In a Page

The saffron censorship that governs India: Why national pride and religious sentiment trump freedom of expression

The saffron censorship that governs India

Zareer Masani reveals why national pride and religious sentiment trump freedom of expression
Prince Charles' 'black spider' letters to be published 'within weeks'

Prince Charles' 'black spider' letters to be published 'within weeks'

Supreme Court rules Dominic Grieve's ministerial veto was invalid
Distressed Zayn Malik fans are cutting themselves - how did fandom get so dark?

How did fandom get so dark?

Grief over Zayn Malik's exit from One Direction seemed amusing until stories of mass 'cutting' emerged. Experts tell Gillian Orr the distress is real, and the girls need support
The galaxy collisions that shed light on unseen parallel Universe

The cosmic collisions that have shed light on unseen parallel Universe

Dark matter study gives scientists insight into mystery of space
The Swedes are adding a gender-neutral pronoun to their dictionary

Swedes introduce gender-neutral pronoun

Why, asks Simon Usborne, must English still struggle awkwardly with the likes of 's/he' and 'they'?
Disney's mega money-making formula: 'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan

Disney's mega money-making formula

'Human' remakes of cartoon classics are part of a lucrative, long-term creative plan
Lobster has gone mainstream with supermarket bargains for £10 or less - but is it any good?

Lobster has gone mainstream

Anthea Gerrie, raised on meaty specimens from the waters around Maine, reveals how to cook up an affordable feast
Easter 2015: 14 best decorations

14 best Easter decorations

Get into the Easter spirit with our pick of accessories, ornaments and tableware
Paul Scholes column: Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season

Paul Scholes column

Gareth Bale would be a perfect fit at Manchester United and could turn them into serious title contenders next season
Inside the Kansas greenhouses where Monsanto is 'playing God' with the future of the planet

The future of GM

The greenhouses where Monsanto 'plays God' with the future of the planet
Britain's mild winters could be numbered: why global warming is leaving UK chillier

Britain's mild winters could be numbered

Gulf Stream is slowing down faster than ever, scientists say
Government gives £250,000 to Independent appeal

Government gives £250,000 to Independent appeal

Donation brings total raised by Homeless Veterans campaign to at least £1.25m
Oh dear, the most borrowed book at Bank of England library doesn't inspire confidence

The most borrowed book at Bank of England library? Oh dear

The book's fifth edition is used for Edexcel exams
Cowslips vs honeysuckle: The hunt for the UK’s favourite wildflower

Cowslips vs honeysuckle

It's the hunt for UK’s favourite wildflower
Child abuse scandal: Did a botched blackmail attempt by South African intelligence help Cyril Smith escape justice?

Did a botched blackmail attempt help Cyril Smith escape justice?

A fresh twist reveals the Liberal MP was targeted by the notorious South African intelligence agency Boss