MARKS & SPENCER last night rejected a revised takeover offer from Philip Green, the billionaire retail developer, which valued the high street retailer at £8.4 billion.
The company turned down Mr Green’s latest offer of 370p in cash per share, which, it said, “would significantly undervalue the group and its prospects”.
M&S’s board and its advisers took just an hour and a half to reject unanimously the new proposal, which was outlined personally by Philip Green at a meeting with Stuart Rose, M&S’s chief executive, and Paul Myners, chairman, just after 4pm yesterday.
The new proposal, worth £11.9 billion including M&S’s existing debt and working capital, demonstrated Mr Green’s substantial money-raising muscle. Mr Green’s family put up an additional £50 million, taking their investment in the new bid to £1.1 billion.
Mr Green’s existing backers, HBOS, Goldman Sachs and Barclays Capital, also provided an extra £950 million in equity, taking their cash funding to £1.4 billion.
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Shares in M&S rose 6½p higher to 363½p yesterday as investors speculated that Mr Green was about to launch a new takeover proposal.
Investors said last night that they were “disappointed” that Mr Green’s new offer did not come close to the 385p to 395p a share expected.
Mr Green’s first proposal suggested up to 310p a share in cash and 25 per cent of the equity in a new listed vehicle, Revival. Analysts valued that offer at £7 billion to £9 billion.
Stuart Rose said: “We are confident that on July 12 we will be able to outline operational improvements that will demonstrate the value we have in this business.”
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3 WAYS TO GO
Raise bid: Shareholders have said they want at least 400p a share and Mr Green could return with a closer offer.
Go hostile: He could go straight to shareholders, but has said he does not want to do this.
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Walk away: After two rejections from M&S’s board he could withdraw. Under Takeover Panel rules he would not be able to come back with a new offer for six months, but he could be more successful then if Mr Rose fails to live up to expectations by Christmas.