M&S spotlight back on Green

The spotlight was back on retail tycoon Philip Green today after time restrictions on a fresh takeover approach for Marks & Spencer were lifted.

Mr Green was forced to the sidelines for six months by the Takeover Panel after calling off his £9.1bn (€13bn) campaign to land the struggling high street icon in July.

Speculation that the Bhs and Arcadia owner might be willing to revive his interest has shored up the M&S share price in spite of a string of poor trading updates since the summer.

Last week, M&S said it was unlikely to deliver more than £625m (€892.3m) in profits this year after it was forced to cut prices to shift surplus Christmas stock.

Analysts have played down the chances of Mr Green returning with a new offer and expect M&S boss Stuart Rose to be given more time to revive the fortunes of the retailer.

Nick Bubb, of Evolution Securities, has rated the probability of Mr Green launching a second campaign to woo M&S shareholders at 50-50.

This was not a view shared by Seymour Pierce retail expert Richard Ratner who said the chances of Mr Green coming back “are 99.99% against”.

Mr Green was willing to pay 400p for each M&S share in the summer, but the recent trading disappointment meant a similar price was unlikely to be justified this time around.

“We do not believe that he has the appetite now to re-enter the fray,” Mr Ratner said.

Another problem was the increased clout of M&S’s army of small shareholders, whose opposition persuaded Mr Green to drop his bid last year.

M&S used a tender offer to return £2.3bn (€3.3bn) to investors but this was mostly taken up by institutions, increasing the proportion of private shareholders on its register.

Mr Rose has warned shareholders against judging the recovery of the ailing retailer on its recent trading, saying M&S has started 2005 with a clean slate.

“It absolutely changes nothing about what we are planning to do for 2005/6, which I have always said is our recovery year,” he told investors last week.

Changes instigated by Mr Rose include the sale of M&S Money, an overhaul of management and £100m (€142.7m) of savings wrung from the supply chain.