M&S fights off Green bid, for now
initial takeover bid from Philip Green, preferring instead to put
its faith in a new management team. But the retail entrepreneur is
thought unlikely to give up so easily, and M&S' future remains
far from certain.
Rumours of a possible takeover bid for M&S have been circulating for some time, especially since the company's 'recovery' began to stall earlier this year. Never particularly strong, the revival of the under-performing fashion division was the first to crumble, but the situation became critical when the food retail unit, perennial driver of growth, also began to report declines.
Once the rumours began to circulate, Green's name was top of the list of potential buyers, partially because of his other retail investments (he owns the Bhs group, a major High Street rival of M&S) but also because of his previous interest in the group - he tried to buy M&S back in 1990.
So when Green's Revival Acquisitions made an offer for M&S last week valuing it at between £7-9 billion, it came as little surprise to anyone - least of all the new M&S chief executive Stuart Rose. A former colleague of Green, Rose was drafted in by the M&S board both to defend the group against a potential takeover attempt and to relaunch the recovery programme began under former chairman Luc Vandevelde but which so spectacularly began to crumble under chief executive Roger Holmes.
It came as little surprise, then, that one of Rose's first tasks as new M&S chief executive was to reject Revival's bid as undervaluing the company, arguing that a review of the company's current business operations was necessary before any decision could be taken as to the future of the group.
Rose's track record would certainly suggest that he is the man to revive the fortunes of M&S. He worked at M&S for 17 years before heading off to the Argos group and Arcadia, which he eventually sold to Green for a tidy profit, and has long coveted the role of chief executive at Britain's best known High Street retailer.
But while Rose's reputation was clearly an important factor in his appointment, so was that of previous incumbent Luc Vandevelde, and the retailer's board will be wary of putting its faith entirely in the hands of a another 'great redeemer'. For now, then, Rose's task is to fend off the attention of his friend and former colleague Green - only then can the real work of deciding on the latest new direction for M&S truly begin.
But Green will not be put off so easily. Reports in the UK press suggest that Revival is considering a second bid for M&S, one which would value M&S at around £10 billion - a significant increase which may yet prove decisive.
M&S shareholders certainly have plenty to mull over, although it basically boils down to whether they have more faith in Rose or Green. Either way, the M&S of the future is likely to have a distinctly different look, with the long-term viability of the stand-alone stores in particular being called into question. An overhaul of both the clothing and food ranges is the very least than can be expected, whoever ends up in control of the group, but the road is likely to be long indeed before M&S regains its former glories.
