M&S in court action over takeover bid

Philip Green’s legal team was deciding today whether to fight an injunction barring its involvment in the entrepreneur’s battle for Marks & Spencer.

Yesterday, the High Court in the UK ruled in favour of the retailer by temporarily stopping legal firm Freshfields from advising on Mr Green’s proposed £10bn (€15bn) takeover bid, which had been expected this week.

M&S argued there was a conflict of interest as Freshfields was a former client and in possession of confidential information about its business.

Freshfields have until 10.30am today to challenge the ruling by Mr Justice Lawrence Collins, which followed a private hearing over the past two days.

The judge gave his ruling in public following submissions behind closed doors, saying: “I am satisfied that there is a real or serious risk of conflict.”

Granting the injunction, he said: “I find it hard to accept … that there will be no reasonably competent firm in the City able to help, although I do accept that the number of firms who are experts in corporate takeovers is relatively limited.”

The challenge comes just days after M&S announced sweeping boardroom changes as it prepares to respond to the possible offer from Mr Green.

Respected retailer Stuart Rose was recruited as chief executive to replace Roger Holmes, who paid the price for a faltering sales performance at M&S.

The move surprised analysts who said it raised the chances of Bhs boss Mr Green having to table a hostile bid in order to land the high-street giant.

Mr Rose, who worked at M&S for 17 years, knows Mr Green well after the entrepreneur acquired the Top Shop-to-Dorothy Perkins chain Arcadia in 2002. Until then, Arcadia had been run by Mr Rose, who gained credit for concentrating on its main brands and selling off non-core chains.

Shares in M&S have risen more than 25% since Mr Green revealed an intention to bid for the retailer last week through investment vehicle Revival Acquisitions.

Mr Green is reportedly preparing to use £1bn (€1.5bn) of his personal fortune to fund his bid, with the rest coming from banks and existing M&S shareholders, who will be offered shares in a new company, to be listed on the Alternative Investment Market.