M&S shares rise 3% after report hedge fund looking at buying retailer              

Last year, Apollo missed out on buying Asda and this year, it considered joining the bid battle for Morrisons

Shares in Marks & Spencer rose 3% after a report said US investment firm Apollo Global Management has been "running the rule" over the clothing and food retailer.

The Sunday Times report cited "city sources" as saying Apollo considered M&S a bargain, with the group's shares unreasonably weighed down by the impact of the Covid-19 pandemic and the market failing to attribute enough value to M&S's 50% stake in Ocado's retail business.

The report said it was unclear whether Apollo's interest had been dampened by the recent surge in M&S shares - up 33% over the last month. M&S and Apollo declined to comment on the report. The stock gained 3% on Monday, extending year-on-year gains to 87%.

Earlier this month, M&S beat forecasts for first-half profit and upgraded its earnings outlook for the second time this year, sending its stock soaring on bets that one of Britain's most elusive corporate turnarounds could finally materialise.

Last year, Apollo missed out on buying Asda, Britain's No. 3 supermarket, which was taken over by the Issa brothers and TDR Capital. This year, it considered joining the bid battle for Morrisons, its No. 4 supermarket chain. Morrisons was eventually taken over by private equity group Clayton, Dubilier & Rice (CD&R).

Reports this year also linked Apollo with Sainsbury's, Britain's second largest supermarket group after Tesco.

Analysts played down the prospect of a bid for M&S, noting no bidders emerged when its shares were languishing in December 2020 and the impractical nature of splitting up the group's food and clothing businesses. M&S plays a smaller role in grocery shopping in Ireland, north and south, than it does in Britain.

In the Republic, it has only a small part of the annual €13bn spent on groceries, in a market which is dominated by the big five, of SuperValu, Tesco, Dunnes, Lidl, and Aldi. 

Reuters and Irish Examiner