High noon on high street as Green seeks revenge

Following the rejection of his takeover bid, the billionaire owner of Bhs has declared retail war on Marks & Spencer. Can he win?
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The Independent Online

After the ardour of a doomed corporate courtship comes the passionate revenge of the spurned high street suitor. Philip Green, the tycoon who this week dropped his £9.1bn takeover bid for Marks & Spencer, declared a retail war yesterday on the object of his thwarted desire.

After the ardour of a doomed corporate courtship comes the passionate revenge of the spurned high street suitor. Philip Green, the tycoon who this week dropped his £9.1bn takeover bid for Marks & Spencer, declared a retail war yesterday on the object of his thwarted desire.

The 52-year-old entrepren-eur said he was pitching his clothing and homeware empire, ranging from Bhs to Burton, into a "judgement day" battle with M&S, to be fought amid the nation's lingerie aisles and crockery displays.

Hours before, a bellicose Mr Green had to admit defeat in his second attempt to buy M&S, whose share of Britain's £26bn clothing market has dwindled to 10 per cent while rivals such as Next and Mr Green's Arcadia group prosper.

The new management of M&S, led by Stuart Rose, the retail guru and former Green ally, has six months to turn around its fortunes because City rules prohibit any new bid. But Mr Green, a privately educated, self-made billionaire who was selling clothes at 15, made it clear that he was determined to ensure his rivals have as uncomfortable a time as possible.

He said: "The big winners are going to be the customers. What I am fired up about is making sure our own businesses - Bhs, Top Shop, Dorothy Perkins - trade their socks off. And [M&S] are going to have us breathing down their neck in every street, in every shopping centre in the UK. It is going to get my best shot. And we will see who is the best retailer."

Mr Green, who keeps his companies under private ownership after a fractious relationship with the City in the 1990s, may be ready to mount a price war to hit back at M&S. He said: "Customers can look forward to great value, great product in stores they want to shop in. They will be able to decide where they want to shop and who's got the best offer. There will be a very clear judgement day in every street in the country. We'll see where people do their shopping."

The aggressive stance of the Monaco-based entrepreneur, who is worth an estimated £3bn and threw a £5m toga party in Cyprus for his 50th birthday, turned his bid into one of the most hard-fought takeover battles of recent years. Allegations of insider trading were levelled against Mr Rose,who has a track record of turning around struggling retailers, because he had bought 100,000 M&S shares within two hours of a mobile phone call from Mr Green inviting him to a meeting before the launch of his bid.

Mr Rose, 55, who was made chief executive of M&S four days later to fend off the takeover, insisted he had not been aware of Mr Green's intentions, although he was later invited by the billionaire to join his bid. The Financial Services Authority cleared Mr Rose last week of any wrongdoing, after he discovered that his mobile phone records had been accessed and details of his social engagements leaked. There was no suggestion that Mr Green or his large body of advisers were involved in cloak-and-dagger tactics.

The consortium headed by the billionaire, whose guests in Cyprus included Mr Rose, finally withdrew its £9.1bn bid, including £1.6bn of Mr Green's own money, on Wednesday evening after M&S fought a successful rearguard action by promising to streamline its business and revamp its stores.

Retail experts doubt the ability of Mr Green to inflict damage on M&S with a price war, suggesting the overlap with his flagship, Bhs, is too narrow. Nick Bubb, an analyst with broker Evolution Beeson Gregory, said: "Philip said during the bid that he was going to bring 'theatre and magic' to the M&S stores. But where is the theatre and magic in the Bhs stores?

"The overlap with M&S is at the bottom end of their market. Green's success thus far isn't coming from increasing top-line sales at Bhs. But it may be that by launching discounts and promotions, he could hit M&S."

The autumn and Christmas sales periods are expected to be crucial for M&S as Mr Rose tries to persuade shareholders that Mr Green's offer of £4 a share undervalued the company, and show consumers that the grande dame of the British high street is rejuvenated.

But, despite Mr Green's war dance, it seemed last night that the thwarted Bhs owner will be avoiding the limelight, at least for a short while. One adviser said: "He has said he is taking a long holiday."

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