Green says private investors foiled bid

Private investor opposition to Philip Green's £9.1bn bid proposal for Marks & Spencer was the key factor in forcing the Bhs entrepreneur to drop his takeover plans.

Private investor opposition to Philip Green's £9.1bn bid proposal for Marks & Spencer was the key factor in forcing the Bhs entrepreneur to drop his takeover plans.

Mr Green admitted to Nick Bubb, retail analyst at Evolution Beeson Gregory, that the reason he had insisted on a board recommendation as a condition of proceeding with his bid was to secure the support of the crucial 20 per cent stake in M&S owned by private investors.

Yesterday Mr Bubb published an interview he had with Mr Green on Thursday. Asked why he had not gone hostile with his bid, Mr Green said: "Because of my financing I had to get a minimum 75-90 per cent of the shares to get control. The only way to do that was to get the private investors onside. The only way to do that was to get the board onside. Once the AGM came out against me, I knew I couldn't do it."

The annual meeting on Wednesday gave Mr Green's bid a resounding thumbs down. Only one investor, Leonard Bash, openly urged the meeting to accept Mr Green's 400p-a-share bid. He was booed by some 3,000 shareholders present at the meeting.

In the interview Mr Green said: "Why wouldn't the board talk to me? Every bid is done this way; look at Debenhams, WH Smith. I did it this way with Arcadia." Mr Bubb asked him why, if he wanted a board recommendation, did he antagonise them? "I did not have a fight in the street with Stuart Rose," said Mr Green in reference to a chance meeting the pair had outside M&S's Baker Street headquarters shortly after Mr Rose had been appointed chief executive and Mr Green had revealed plans to bid.

One element of Mr Green's tactics which has puzzled analysts is why he didn't take a stake in M&S to pressure the board. The increase in the share price after Mr Green's initial approach would have paid for the costs of mounting the bid. "It's not a question of paying fees. I don't need to make a £20m profit. I didn't want to be accused of profiteering by share dealing," he explained.

Mr Bubb said that Mr Green had been quick to boast about the 2002-03 Bhs results and asked why he had not published the 2003-04 results.

"I don't have to. I will release them at the same time as the Arcadia results, in October just like last year. Profits will not be down. I have the highest returns in Europe," said Mr Green.