M&S 'to offer shareholders less'

Speculation was mounting today that troubled retailer Marks & Spencer would offer investors less for their shares than the £4 (€5.89) promised by billionaire Philip Green in his takeover bid.

The group is due to announce the terms of its £2.3bn (€3.4bn) tender offer to buy back shares from investors on Tuesday, as part of its promise to return money to shareholders.

But Sunday newspapers speculated today that the buy-back price range would only be between 340p to 380p a share, compared with the £4 offered by Mr Green.

The share buy-back was part of a package of measures announced by chief executive Stuart Rose to win shareholders backing after fighting off Mr Green’s £9.1bn (€13.4bn) takeover approach earlier in the summer.

Other measures also included the sale of M&S Money, the loss of 650 jobs at its West London headquarters, the closure of its homewares business Lifestore in Gateshead, a reduction in the number of clothing lines on offer and a revamp of its stores to make them less cluttered.

But the tender offer is likely to infuriate investors who are keen to offload their shares, which closed at 350.25p on Friday, and are likely to see Mr Green’s offer as better value.

There is also likely to be more bad news for shareholders with Mr Rose widely expected to announce poor summer sales figures when he up-dates the market on the group’s trading on Tuesday at the same time as he unveils details of the tender offer.

He is expected to say clothing sales, particularly in women’s and childrensware, continued to be disappointing over the summer, as the group lost out to rivals such as Asda and Next.

But the group is thought to have made a more positive start to the autumn trading period.

In August, Asda overtook M&S as Britain’s biggest clothing retailer, with figures from market research group Taylor Nelson Sofres showing the supermarket had grown its share of the market, based on the amount of clothes it sells, to 9.4%, while M&S’s share remained static at 9.1%.

M&S suffered a further blow earlier this month when it was announced that Yasmin Yusuf, who was recruited from high street chain Warehouse to revamp its women’s clothing range, will leave at the end of the month after three and half years with the group.

It is understood that M&S executives will be meeting tomorrow to finally set the tender price range, the company will then begin writing to investors giving details of the offer on Thursday.

The offer will be voted on by shareholders at an extraordinary general meeting on October 22.