Lukewarm response to M&S bid plan

Billionaire Philip Green today drew a lukewarm response from investors after outlining details of a proposed £9bn (€13.5bn) takeover of Marks & Spencer.

Shares fell 4% after the Bhs and Arcadia boss announced he was ready to give M&S shareholders up to £7bn (€10.5bn) in cash and a 25% stake in a newly-listed company.

The offer came with a string of conditions including the disclosure of confidential information and a recommendation from the M&S board.

Analysts said the approach did not appear a knock-out and was likely to be rejected by M&S. This would force Mr Green either to withdraw his interest or mount a hostile campaign that could attract rival bidders such as Asda owner Wal-Mart.

In a statement to the stock exchange today, Mr Green said his proposal was supported by £9bn (€13.5bn) in financing – including £1.05bn (€1.6bn) of his family fortune.

But a firm offer would only be made once M&S had opened its books and provided details of trading over the past six weeks.

Mr Green also pressed for the disclosure of the contract agreed between M&S and fashion designer George Davies when he joined the retailer from Asda.

The entrepreneur is seeking a review of the investment programme at its Simply Food outlets, Per Una womenswear stores and homewares business Lifestore.

Any offer would be made through Revival Acquisitions – a company owned by Mr Green and members of his family.

M&S has already shown an unwillingness to roll over, axing chief executive Roger Holmes and replacing him with respected retailer Stuart Rose on Monday.

Investec analyst Mark Charnock said the boardroom change may have lost Mr Green the initiative and raised doubts about his ability to mount a successful takeover bid.

“It makes you wonder whether there is a bit of backtracking here, given the developments of the past few days, with Stuart Rose being appointed,” he said.