Outlook: Only the brave would don St Michael's halo

IS IT FINALLY time to buy Marks & Spencer? Hope springs eternal when it comes to the fabled St Michael, and Britain's new model army of private investors reckons it is. M&S is still such a powerful brand, the thinking goes, and its shares have so plainly been oversold, that eventually it must recover. Either that, or someone will bid for it.

It scarcely needs repeating that this was being said a year ago, six months ago, even three months ago, and every time the price has gone lower still. Indeed, it has been said all the way from the peak two years ago, when the shares were still trading at more than 650p.

But, with the price up more than 20 per cent over the last two days, on gigantic volume, there is now plainly a real head of steam behind the belief that the company has finally hit bottom. Not even M&S's bland assertion yesterday that it knew of no reason for the sudden share price movement dented optimism much; the shares largely hung on to their gains.

Now, it is often the case that the target company is the last to know of the predator waiting in the bushes, ready to strike, and it is this, rather than renewed confidence in trading prospects, that has really captured the market's imagination.

As our news story opposite reports, there are three obvious candidates - Kingfisher, jilted at the altar by Asda in favour of Wal-Mart; Asda's former boss, Archie Norman; and Tesco. To this slate ought to be added a fourth possibility - a financial purchaser - such is the perceived scope for gearing up M&S's balance sheet.

In these markets anything is possible, and a hostile bid certainly should not be discounted altogether. But there are any number of reasons for thinking that this is yet another false dawn for M&S shares. Take the market favourites to bid. Kingfisher would certainly love to do it, but has it got the management? It was partly to address this problem that it bid for Asda, only to be outgunned by Wal-Mart, and it is not at all clear what it would bring to the party at M&S.

Tesco already has its work cut out defending its own brand, not to mention its overseas expansion programme. Reviving M&S might be the management challenge too far - besides which, it would undoubtedly face a competition problem given M&S's 3 per cent share of the national groceries market.

As for Archie and Knutsford, well maybe, but still it seems a trifle implausible. M&S and its shareholders are desperate, and if Mr Norman wanted the job they would be only too happy to give him it. But how much value would they be prepared to cede to him? Knutsford is valued by the stock market at pounds 655m, and outstanding businessmen though Mr Norman is, most shareholders would baulk at that.

A cash bid from a financial buyer might be a different matter. Unfortunately, things don't seem to be getting any better at M&S. Trading remains dire. In these circumstances, a cash bid becomes extremely high risk. The company seems to have great asset backing, but how much are these stores really worth if e-commerce is going to drain them of their custom?

Not wishing to be a wet blanket, but whoever takes on M&S still has a mountain to climb in turning round its fortunes. All the same, you never know. Optimism is the name of the game these days, and someone may be brave enough.

peopleFrankie Boyle responds to referendum result in characteristically offensive style
Arts and Entertainment
'New Tricks' star Dennis Waterman is departing from the show after he completes filming on two more episodes
tvHe is only remaining member of original cast
Arts and Entertainment
tvHighs and lows of the cast's careers since 2004
New Articles
Life and Style
Couples have been having sex less in 2014, according to a new survey
Arts and Entertainment
musicBiographer Hunter Davies has collected nearly a hundred original manuscripts
ebooksAn unforgettable anthology of contemporary reportage
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

iJobs Job Widget
iJobs Money & Business

Senior BA - Motor and Home Insurance

£400 - £450 Per Day: Clearwater People Solutions Ltd: **URGENT CONTRACT ROLE**...

Market Risk & Control Manager

Up to £100k or £450p/d: Saxton Leigh: My client is a leading commodities tradi...

SQL Developer - Watford/NW London - £320 - £330 p/d - 6 months

£320 - £330 per day: Ashdown Group: The Ashdown Group have been engaged by a l...

Head of Audit

To £75,000 + Pension + Benefits + Bonus: Saxton Leigh: My client is looking f...

Day In a Page

Scottish referendum: The Yes vote was the love that dared speak its name, but it was not to be

Despite the result, this is the end of the status quo

Boyd Tonkin on the fall-out from the Scottish referendum
Manolo Blahnik: The high priest of heels talks flats, Englishness, and why he loves Mary Beard

Manolo Blahnik: Flats, Englishness, and Mary Beard

The shoe designer who has been dubbed 'the patron saint of the stiletto'
The Beatles biographer reveals exclusive original manuscripts of some of the best pop songs ever written

Scrambled eggs and LSD

Behind The Beatles' lyrics - thanks to Hunter Davis's original manuscript copies
'Normcore' fashion: Blending in is the new standing out in latest catwalk non-trend

'Normcore': Blending in is the new standing out

Just when fashion was in grave danger of running out of trends, it only went and invented the non-trend. Rebecca Gonsalves investigates
Dance’s new leading ladies fight back: How female vocalists are now writing their own hits

New leading ladies of dance fight back

How female vocalists are now writing their own hits
Mystery of the Ground Zero wedding photo

A shot in the dark

Mystery of the wedding photo from Ground Zero
His life, the universe and everything

His life, the universe and everything

New biography sheds light on comic genius of Douglas Adams
Save us from small screen superheroes

Save us from small screen superheroes

Shows like Agents of S.H.I.E.L.D are little more than marketing tools
Reach for the skies

Reach for the skies

From pools to football pitches, rooftop living is looking up
These are the 12 best hotel spas in the UK

12 best hotel spas in the UK

Some hotels go all out on facilities; others stand out for the sheer quality of treatments
These Iranian-controlled Shia militias used to specialise in killing American soldiers. Now they are fighting Isis, backed up by US airstrikes

Widespread fear of Isis is producing strange bedfellows

Iranian-controlled Shia militias that used to kill American soldiers are now fighting Isis, helped by US airstrikes
Topshop goes part Athena poster, part last spring Prada

Topshop goes part Athena poster, part last spring Prada

Shoppers don't come to Topshop for the unique
How to make a Lego masterpiece

How to make a Lego masterpiece

Toy breaks out of the nursery and heads for the gallery
Meet the ‘Endies’ – city dwellers who are too poor to have fun

Meet the ‘Endies’ – city dwellers who are too poor to have fun

Urbanites are cursed with an acronym pointing to Employed but No Disposable Income or Savings
Paisley’s decision to make peace with IRA enemies might remind the Arabs of Sadat

Ian Paisley’s decision to make peace with his IRA enemies

His Save Ulster from Sodomy campaign would surely have been supported by many a Sunni imam