Marks & Spencer is preparing to make radical management changes in order to defend itself against the £9bn bid that Philip Green is planning to table this week.
Shareholders are demanding the immediate departure of Luc Vandevelde, the part-time chairman who has signalled his intention to go, and want a top retailer brought in, with former Arcadia boss Stuart Rose a firm favourite.
Roger Holmes, the chief executive, is also expected to go once the chairmanship issue is resolved. There are also concerns about Vittorio Radice's recently expanded role, which takes in clothing and the new homewares area, and the relative inexperience of Maurice Helfgott, who took over the ailing foods side after Justin King was poached by J Sainsbury. A source close to M&S admitted: "The management issue is on the agenda and will be addressed."
Mr Green, the owner of Bhs and Arcadia, will table a conditional offer towards the end of this week. He is expected to say that he will pay up to 400p a share, or nearly £9bn, in an agreed deal.
"Any proposal made would require a recommendation," he told The Independent on Sunday. However, it is understood that he is willing to go hostile if the M&S board rejects his approach.
Mr Green has secured bank finance from HBOS, Royal Bank of Scotland and Barclays Capital, while Goldman Sachs and Merrill Lynch are willing to underwrite an equity element of the offer. Mr Green will invest up to £600m of his family's fortune in a bid vehicle.
Mr Green said that he would float the new company on the London Stock Exchange. This company would only own Marks & Spencer while Bhs and Arcadia would continue to be held privately in vehicles controlled by Mr Green.
City analysts have raised concerns that this would create a conflict of interest because the high-street clothing chains compete with each other. However, Mr Green rubbished these worries, arguing that these businesses would compete with each other anyway.
He intends to be chief executive of the new company and will recruit an independent chairman, someone who has not worked with him before.
Mr Green claims he will have no trouble meeting the City's rules on how companies are run. "We run our companies by the same corporate governance standards," he said.
"We own big-scale businesses that would stand up to the closest scrutiny."
However, people associated with Amber Day, the last public company Mr Green ran, which he quit in 1991, say he would have to have a complete change of attitude to meet today's standards.
"I don't know how shareholders can hold him accountable. He is impossible. He reacts with some very short Anglo-Saxon words. If anyone else is going to be chairman they are in it for the money and the ride. It's a question of leopards and spots."
Mr Green is also planning to turn to his old friend Allan Leighton, the chairman of Royal Mail, to help him turn around M&S's troubled food business. Mr Leighton was the boss of Asda before he quit to pursue a "portfolio career".
Although his is not formally part of Mr Green's bid team, he has been helping him and is likely to be involved in recruiting a new boss for the food side.
Some retail experts believe Mr Green may sell off M&S's food business if he wins control of the retailer.
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