Suitor says per una contract is a 'poison pill' to block bids

Philip Green alleged yesterday that the contract with the per una designer George Davies could be a poison pill conjured up by Marks & Spencer's previous management to protect them from a takeover bid.

Philip Green alleged yesterday that the contract with the per una designer George Davies could be a poison pill conjured up by Marks & Spencer's previous management to protect them from a takeover bid.

The Green camp, which is being advised by Goldman Sachs and Merrill Lynch, said £450m hinged on the nature of the contract struck with Mr Davies four years ago. Mr Green has made 20p of his offer conditional on gaining disclosure of the terms and conditions of the contract between M&S and Mr Davies.

His team of advisers fear that Mr Davies, who launched his per una range for M&S in September 2001, negotiated a change of control clause in his contract that gives him the right to sell the trendy womenswear label back to whomever acquires the retailer at a big price. The cost of extricating the group is likely to be a multiple of the label's total post-tax profits achieved since its launch.

Paul Myners, M&S's acting chairman, confirmed Mr Green's concerns, although he denied that the retailer would be sold. "There is a change of control provision. But there is no change of control contemplated," he said.

M&S insiders maintained last night there was nothing in the change of control clause that could be described as a poison pill. Luc Vandevelde and Roger Holmes, the executive duo ousted earlier this week, struck the contract with Mr Davies shortly after Mr Green's previous attempt to buy M&S in 1999. Per una, which contributes 10 per cent of the group's total womenswear sales, has lived up to the hype, prompting a spin-off brand, Mr Davies, who launched Asda's George clothing range, owns the per una label. The contract has been the subject of huge speculation because it was drawn up by Freshfields, the law firm that until Wednesday was advising Mr Green on his takeover.

Mr Green cut short an interview with Channel 4 News last night after being asked about a High Court judgment blocking Freshfields from acting for him in any bid for M&S.

He is now being advised by Ashurst Morris and Crisp.

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