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.

PROMOTED VIDEO
News
Angelina Jolie with her father Jon Voight
people
News
Bill Kerr has died aged 92
people
Sport
footballPremiership preview: All the talking points ahead of this weekend's matches
Arts and Entertainment
Warner Bros released a mock-up of what the new Central Perk will look like
tv'Friends' cafe will be complete with Gunther and orange couch
News
Keira Knightley poses topless for a special September The Photographer's issue of Interview Magazine, out now
people
News
ebooksAn evocation of the conflict through the eyes of those who lived through it
Voices
The Ukip leader has consistently refused to be drawn on where he would mount an attempt to secure a parliamentary seat
voicesNigel Farage: Those who predicted we would lose momentum heading into the 2015 election are going to have to think again
Arts and Entertainment
Cara Delevingne made her acting debut in Anna Karenina in 2012
film Cara Delevingne 'in talks' to star in Zoolander sequel
News
i100
Sport
Mario Balotelli pictured in his Liverpool shirt for the first time
football
Life and Style
tech
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating
and  

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

iJobs Job Widget
iJobs Money & Business

SAS Business Analyst - Credit Risk - Retail Banking

£450 - £500 per day: Orgtel: SAS Business Analyst, London, Banking, Credit Ris...

Project Manager - Pensions

£32000 - £38000 Per Annum Bonus, Life Insurance + Other Benefits: Clearwater P...

KYC Analyst, Birmingham - £200-£250 p/d

£200 - £250 per day + competitive: Orgtel: KYC Analyst, Key Banking Client, Bi...

Test Manager - Banking - Yorkshire - £450 per day

£400 - £500 per day: Orgtel: Test Manager - Banking - West Yorkshire - £400-£5...

Day In a Page

Ukraine crisis: The phoney war is over as Russian troops and armour pour across the border

The phoney war is over

Russian troops and armour pour into Ukraine
Potatoes could be off the menu as crop pests threaten UK

Potatoes could be off the menu as crop pests threaten UK

The world’s entire food system is under attack - and Britain is most at risk, according to a new study
Gangnam smile: why the Chinese are flocking to South Korea to buy a new face

Gangnam smile: why the Chinese are flocking to South Korea to buy a new face

Seoul's plastic surgery industry is booming thanks to the popularity of the K-Pop look
From Mozart to Orson Welles: Creative geniuses who peaked too soon

Creative geniuses who peaked too soon

After the death of Sandy Wilson, 90, who wrote his only hit musical in his twenties, John Walsh wonders what it's like to peak too soon and go on to live a life more ordinary
Caught in the crossfire of a cyber Cold War

Caught in the crossfire of a cyber Cold War

Fears are mounting that Vladimir Putin has instructed hackers to target banks like JP Morgan
Salomé's feminine wiles have inspired writers, painters and musicians for 2,000 years

Salomé: A head for seduction

Salomé's feminine wiles have inspired writers, painters and musicians for 2,000 years. Now audiences can meet the Biblical femme fatale in two new stage and screen projects
From Bram Stoker to Stanley Kubrick, the British Library's latest exhibition celebrates all things Gothic

British Library celebrates all things Gothic

Forthcoming exhibition Terror and Wonder: The Gothic Imagination will be the UK's largest ever celebration of Gothic literature
The Hard Rock Café's owners are embroiled in a bitter legal dispute - but is the restaurant chain worth fighting for?

Is the Hard Rock Café worth fighting for?

The restaurant chain's owners are currently embroiled in a bitter legal dispute
Caribbean cuisine is becoming increasingly popular in the UK ... and there's more to it than jerk chicken at carnival

In search of Caribbean soul food

Caribbean cuisine is becoming increasingly popular in the UK ... and there's more to it than jerk chicken at carnival
11 best face powders

11 best face powders

Sweep away shiny skin with our pick of the best pressed and loose powder bases
England vs Norway: Roy Hodgson's hands tied by exploding top flight

Roy Hodgson's hands tied by exploding top flight

Lack of Englishmen at leading Premier League clubs leaves manager hamstrung
Angel Di Maria and Cristiano Ronaldo: A tale of two Manchester United No 7s

Di Maria and Ronaldo: A tale of two Manchester United No 7s

They both inherited the iconic shirt at Old Trafford, but the £59.7m new boy is joining a club in a very different state
Israel-Gaza conflict: No victory for Israel despite weeks of death and devastation

Robert Fisk: No victory for Israel despite weeks of devastation

Palestinians have won: they are still in Gaza, and Hamas is still there
Mary Beard writes character reference for Twitter troll who called her a 'slut'

Unlikely friends: Mary Beard and the troll who called her a ‘filthy old slut’

The Cambridge University classicist even wrote the student a character reference
America’s new apartheid: Prosperous white districts are choosing to break away from black cities and go it alone

America’s new apartheid

Prosperous white districts are choosing to break away from black cities and go it alone