Green’s M&S battle shifts to the US

THE battle for Marks & Spencer switched to the United States yesterday as retailing tycoon Philip Green prepared for talks with the company’s biggest shareholders.

Reports said the owner of Arcadia and BHS could walk away from bidding if major US investors side with the firm's new management team.

The M&S board has already rejected two approaches including an £8.4 billion (e12.8bn) offer on Wednesday but could come under increasing pressure if institutions holding an estimated 20% of the company offer Mr Green encouragement.

The major target for Mr Green will be Brandes Investment Partners, the San Diego-based fund manager which owns 12% of the high street giant.

One report said a favourable reception from the United States could prompt Mr Green to table a £8.8 billion (e13.4bn) cash bid, pitched at up to 390p a share.

That could be enough for M&S to allow the entrepreneur to inspect its books ahead of a formal offer, The Observer reported. However, the price still falls short of the 400p a share that many UK shareholders are pressing for.

Investors may also be keen to wait until new chief executive Stuart Rose has outlined details of a strategic review on July 12.

The Sunday Telegraph said Mr Rose's main message was likely to be the need to focus on the retailer's traditional middle-aged market after becoming too obsessed on initiatives such as Per Una Due, a teenage fashion brand.

He may also consider returning up to £750 million (€1,114m) to shareholders, a move that would be possible from property deals and increased borrowing.

It is thought that a re-evaluation of the group's property portfolio could show its sites are worth more than double the £2.1 billion (€3.2bn) quoted in the company's annual report and accounts.

Mr Green gathered an extra £1.4 billion (€2.1bn) of financing for his latest approach but expressed surprise at the speed at which the proposal was rejected, particularly the equity element of his offer.

He told yesterday's Sunday Telegraph: "People have got to decide what is hope and what is reality. I offer some reality and some hope, in the form of cash and equity. This is a retailing fix. That's the basis of what I do for a living."