Leading shareholders in Marks & Spencer are demanding that chief executive Stuart Rose reconsider Philip Green's £8.38bn offer for the company.
Some of M&S's larger institutional investors are angry at the way he dismissed Mr Green's second 370p-a-share approach and are planning to raise the issue with Mr Rose and his chairman Paul Myners over the next two weeks.
"The decision was cavalier. We will be calling to make our views known," said one institutional investor who asked not to be identified. The news will be a blow to M&S's board, which had assumed that institutional investors supported the way it swiftly rejected the billionaire's advances.
Mr Green's last approach, made on 16 June, was conditional on M&S answering 14 questions. These included details of Per Una creator George Davies's contract, and information on M&S's pension fund. Shareholders contacted by The Independent on Sunday said that they wanted M&S to answer Mr Green's questions, to establish whether his latest offer was viable.
"The information Green has asked for does not amount to due diligence. Providing it will not put M&S at a competitive disadvantage," said another shareholder. "We are charged with making money for our clients. For those people who want to ride on the coat-tails of Green and take his stub equity then the offer could be worth well over 400p a share."
Mr Green, who was in Mon-aco this weekend, declined to comment. But he is expected to wait until shareholders have put pressure on M&S's board before making another approach.
UK-based investors in M&S are closely watching the actions of the company's largest shareholder, Brandes Investment Partners of San Diego in California. Representatives from Mr Green's bid team have contacted the fund manager in the past few weeks to present their case for the offer.
Brandes refuses to comment on M&S. But a source independent of the bid battle, which had recent contact with Brandes, said the investor wanted M&S to answer Mr Green's 14 questions.
M&S has so far stood firm. A company source said: "If we thought that the offer was recommendable then we would have allowed some due diligence. But it wasn't."
Since Mr Green announced he was interested in buying M&S on 27 May, Brandes has reduced its stake in the company by 1.15 per cent, taking its holding to 11.84 per cent. The Rose and Green camps have both found ways to claim that this proves Brandes is behind them.
M&S's second-largest shareholder, Barclays, has increased its stake, but its shares are held in tracker funds. The third- largest shareholder, Capital Group, reduced its holding by 0.21 per cent to 3.82 per cent.
Meanwhile, Mr Rose is attempting to maintain the momentum of change. The chief executive has turned his attention to M&S's external advisers and is expected to make a number of cuts. IBM, which was hired by Mr Rose's predecessor, Roger Holmes, will be an early casualty, according to insiders.
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