Philip Green Sets Out Terms For M&S Bid

Arcadia owner Philip Green has set out the terms of his proposed offer for Marks & Spencer, pressing for a recommendation from the board for an offer valuing the company at around GBP9bn.

Green has so far not made a formal bid, but has issued details of his possible offer, to be made through Green's newly formed business Revival Acquisitions. Revival is proposing an offer of between 290p and 310p-a-share in cash, along with a 25 per cent stake in Revival. The true value of the bid will depend on the worth the City places on the 25 per cent so-called 'stub equity' stake.

Green has set out a series of conditions for formalising the bid including, crucially, the recommendation of the M&S board. He is also seeking information from M&S including details of the contract between the retailer and fashion designer George Davis.

Other information sought by Green includes details of the capital expenditure commitments M&S has made to new store formats including Lifestore, Simply Food and the planned Per Una standalone stores.

The Green family plans to invest GBP1bn of its own funds in the offer, with the rest coming from a consortium of banks. M&S has moved quickly to bolster its defences since the potential Revival bid was announced a week ago, with Stuart Rose replacing Roger Holmes as chief executive.

The issue for the M&S board is deciding whether or not to recommend the Revival bid is whether M&S has now done enough to convince shareholders to give the business the time needed to restore flagging sales.

Early indications are that the City is disappointed that the offer has not been pitched higher, with M&S shares falling by around 4 per cent in Thursday morning trading.