Tycoon marshals £9bn to buy Marks and Spencer
British retail magnate Philip Green launched a takeover battle for Marks and Spencer on Thursday, unveiling a war chest of £9-billion (about R106-billion) to fund a bid for the struggling retailer.
The Monaco-based billionaire owner of fashion retailers Bhs and Arcadia said he is prepared to pay 290 pence to 310 pence a share in cash plus a 25% interest in the equity of his investment vehicle Revival Acquisitions.
But he said any firm offer for the group is subject to the approval of Marks and Spencer’s board and a review of financial information he hopes to obtain from the retailer.
“There can be no certainty that any offer will ultimately be made,” Revival Acquisitions said in a statement.
Marks and Spencer, a household name feature of many high streets in Britain, has been left looking vulnerable after seeing a recovery falter over the past 12 months amid fierce competition from smaller fashion retailers and larger supermarket chains.
The group has not yet responded to Green’s statement but its new management appears unlikely to give in without a fight.
Marks and Spencer announced a sweeping boardroom clear-out on Monday that saw both Roger Holmes and chairperson Luc Vandevelde removed with immediate effect—a move seen as an attempt to ward off Green’s advances.
New chief executive Stuart Rose, a former chief executive of Green’s Arcadia group, quickly insisted that selling up is not an option.
“I’ve been here five minutes and I didn’t take this job to sell the business,” he told reporters soon after his appointment.
In London shares in retailer Marks and Spencer fell by 4,44% to 349,75 pence as investors gave a lukewarm response to the terms of a possible takeover offer.
One of the retailer’s top 10 shareholders described Green’s proposed offer as “unexciting”.
“The numbers don’t look exciting even for a siting shot,” the shareholder told AFP’s financial newswire AFX on condition of anonymity.
“There’s a lot of conditionality and not a lot of visibility as far as the equity piece is concerned.”
Revival said it has arranged committed financing of £9-billion to fund the cash payment for the proposal and refinance Marks and Spencer’s existing debt.
Green and his family have committed up to £1,05-billion of their own money for a possible offer.
Additional equity funding or £450-million will be provided by the banks HBOS, Goldman Sachs and Barclays Capital, Revival said.
Barclays Capital, Goldman Sachs, Halifax, Merrill Lynch and Royal Bank of Scotland have also committed debt financing of £7,5-billion.—Sapa-AFP.