M&S rejects Green takeover bid

Click to follow
The Independent Online

High street giant Marks & Spencer today knocked back a £9.1 billion takeover proposal from retail tycoon Philip Green.

High street giant Marks & Spencer today knocked back a £9.1 billion takeover proposal from retail tycoon Philip Green.

It said the "final proposal" of 400p per share from Mr Green continued to undervalue the group and its prospects.

M&S added that the Bhs and Arcadia owner had not explained how he would tackle competition issues if his bid was successful.

Concerns were also raised by the M&S board at the financing and ownership structure of bid vehicle Revival Acquisitions.

Chief executive Stuart Rose is due to outline his vision of how to improve the trading performance of M&S on Monday.

"The board believes that Revival's proposal for M&S of 400p per share continues to undervalue the group and its prospects significantly," the company said in a statement today.

"Furthermore, it is confident that it will demonstrate this to shareholders on July 12."

Analysts said the battle for control of the retailer was not over, even though

Mr Green has vowed only to make a formal bid with the support of the M&S board.

Retail analyst Rhys Williams, of stockbrokers Seymour Pierce, said the response of investors to the strategic review on Monday will be crucial.

"We believe 400p is a pretty decent price for this business. M&S will have to come out with all the stops to show why it didn't recommend this offer," he said.

Mr Green has secured the support of US-based Brandes - the largest shareholder in M&S with an 11.7% stake - for his offer.

And the entrepreneur revealed today that investment bank Schroders, which has a 1.2% interest, has also agreed to sell its shares if he can win a recommendation from the M&S board.

In its statement, M&S said the results of the review on Monday would contain important new information in respect of its operations and strategy.

"Shareholders will (then) be able to make an informed assessment of the board's view," the company said

Analysts expect Mr Rose to announce more than £100 million of savings from the supply chain, a revaluation of M&S property and initiatives to drive like-for-like sales.

Shares fell more than 2% in the wake of the rejection of the latest approach from Mr Green.

M&S today said the proposal carried "a number of major areas of uncertainty" which needed clarification.

These included details on the value of the share alternative being offered by Mr Green in bid vehicle Revival Acquisitions.

It also sought more details on the extent of the due diligence that Mr Green wishes to carry out in partnership with his team.

Concerns were raised by the M&S board over "the assumptions" made by Revival when urging the retailer to open its books, including issues relating to its pensions fund.

Mr Green has requested a meeting with the trustees of the fund, which has a £670 million deficit according to the latest annual report and accounts of M&S.

A one-month deadline for formal offers set by the Takeover Panel this week had increased the urgency for details of the fund to be disclosed, he said on Wednesday.

In particular, Mr Green wants to know whether M&S agreed a future funding plan when it injected £400 million into the fund earlier this year.

Comments