Tycoon betters bid for M

RETAIL tycoon Philip Green could ditch his bid to take over Marks & Spencer if talks with the trustees of its pension fund fail, it was reported yesterday.

Mr Green is believed to be putting the finishing touches to an improved offer of £8.8 billion and could outline the revised terms as early as this week.

But the new offer is thought to hinge on details of the size of the pensions hole at M&S being made available to Mr Green by the trustees of the fund.

The latest annual report of M&S reveals a £670 million deficit in the pensions fund and the trustees have the right to ask any bidder to fill the gap immediately.

This could prove too costly for Mr Green who has already twice raised his offer for M&S.

M&S has vowed not to stand in the way of Mr Green approaching the trustees directly, a move believed to have the support of its major shareholders.

According to the Sunday Times, shareholders view the disclosure of pensions information as crucial to “flushing out” a bid of nearer 400p a share. Mr Green has so far offered at least 370p a share.

The importance of pension trustees in bidding battles was underlined last month by the collapse of a takeover of high street retailer WH Smith.

Private equity group Permira walked away after it was told to put forward a substantial amount of cash to bridge a gap in its pension fund.

The battle for control of M&S has already taken several twists since Mr Green announced an intention to bid on May 27.

The retailer parachuted in Stuart Rose to replace chief executive Roger Holmes, who admitted sales recovery at M&S had faltered.

Share deals that took place prior to the announcement of a possible offer by Mr Green are also being probed by the City watchdog.

Mr Rose was questioned by the Financial Services Authority last week over the purchase of 100,000 shares in M&S hours after talking to Mr Green by phone on May 7. He has denied any wrongdoing and said the investment had been planned for months.

And on Wednesday it emerged that an attempt had apparently been made to access Mr Rose’s phone records.

Mobile phone group mm02 has launched an investigation into how a third party was able to register a pass code to view his call records.

There is no suggestion that Mr Green, or anyone connected with him or his bid, is connected to this apparent breach of security.