Green considers 10 billion play for M&S

Retail tycoon Philip Green is planning to launch a 10 billion bid for Marks & Spencer, according to reports.

14:09 30 May 2004

Retail tycoon Philip Green is planning to launch a 10 billion bid for Marks & Spencer, according to reports.

The businessman is believed to planning to invest up to 1 billion of his own fortune in his second bid for the ailing high street chain - the biggest single private-equity investment in UK corporate history.

Mr Green made a play for M&S last Thursday. Shares in the retailer reportedly surged ahead of the announcement and the Financial Services Authority is now investigating having been informed that M&S shares traded had reached abnormally high levels.

"The FSA has noted the price movement prior to the announcement and in line with our policy of reviewing all suspicious price movements is reviewing trading in Marks & Spencer shares and related derivatives," the FSA said.

Some reports suggest that billionaire Mr Green may sell British Home Stores to comply with regulatory concerns surrounding his attempts to takeover M&S.

The Sunday Times claims he has drawn up a sales memorandum and a number of possible buyers for the chain. The newspaper speculated that parties interested in buying Bhs would include Asda owner Wal-Mart.

A purchase of M&S would reportedly give Mr Green, who owns retail group Arcadia and Bhs, 20.4 per cent of the clothing market.

Mr Green's advisers are reported to be working through the weekend in an attempt to finalise the deal before requesting a meeting with the M&S board this week.

Mr Green's bid is now expected to include a cash and shares offer of around 400 pence a share, according to the Observer newspaper.

It is understood that he has secured finance from HBOS, Royal Bank of Scotland and Barclays Capital, while Goldman Sachs and Merrill Lynch are willing to underwrite part of the deal.

Meanwhile, the Independent on Sunday reported today that M&S shareholders are calling for Luc Vandevelde, the part-time chairman, to quit. Shareholders reportedly want a top retailer, such as Arcadia boss Stuart Ross, brought in to reverse M&S' fortunes.