Green’s £9.1bn bid raises takeover heat

TYCOON Philip Green turned up the heat on Marks & Spencer yesterday by increasing his proposed takeover offer to £9.1 billion and securing the support of its largest investor.

Mr Green said he expected other M&S investors to follow US-based Brandes, which has an 11.7% stake, in accepting his “final proposal” to pay 400p for each of the company’s shares.

The Bhs and Arcadia owner said: “Brandes knows more than anybody else where this company has been over the past four years and this is the right value.”

The latest proposal remains conditional on the support of the M&S board, which has twice rejected approaches on the grounds that they significantly undervalued the company and its prospects.

An M&S spokesman said it noted today’s announcement and would respond in due course.

M&S chief executive Stuart Rose is due to outline his vision for improving the trading performance of the retailer on Monday.

This is expected to include savings from the supply chain, a revaluation of M&S property and initiatives to drive like-for-like sales.

Mr Green ruled out mounting a hostile takeover campaign if his overtures are rebuffed again, vowing to “go and sit on a beach”.

In addition to the cashoffer, investors would be able to accept a lower sum and take a 30% stake in bid vehicle Revival Acquisitions.

But the deal also hinges on M&S allowing his team to complete due diligence before a formal bid is made.

“This is the biggest amount of money ever put up in Europe,” Mr Green said.

“Most people would understand that we need to get an element of comfort because we are on the outside looking in. That can’t be unreasonable.”

A formal offer would have to be delivered to investors ahead of the August 6 deadline set by the Takeover Panel yesterday.

City stockbrokers Seymour Pierce said that the new proposal was too high for M&S to dismiss summarily, and that it should attract the support of other investors.

But other analysts were more cautious, and a rise of only 4% in M&S shares to 374p suggested that the offer may not be enough to land a knock-out blow.

Retail analyst Nick Bubb, of Evolution Beeson Gregory, said that the new offer represented Mr Green’s best shot but was unlikely to win over shareholders.

“He’s still seeking a recommendation and I don’t think M&S will give it to him.

“But this is not an offer that it can dismiss out of hand,” he said.

Mr Rose’s review of the business was expected to be ‘pretty punchy’ and profits forecasts were likely to be moved up.

“This is not a joke offer (from Mr Green) but, given all that M&S is doing to improve profitability, I think that it’s not going to be quite enough,” he said.