Philip Green To Bid For M&S

UK retail fashion entrepreneur Philip Green hopes to make Marks & Spencer the jewel in the crown of his high street empire. The City expects any successful bid to be pitched at around GBP400p-a-share, valuing M&S at around GBP10bn.

Green, owner of the Bhs and Arcadia chains, has set up a new company to draw up a bid for M&S, Revival Acquisitions. A statement to the Stock Exchange confirmed that Revival "intends to approach M&S in the next few days with its proposal and to seek a recommendation".

The statement said that any proposal "would involve a mixture of cash and shares in a new company which would seek a listing". That changes Green's previous takeover strategy, which has seen Bhs and Arcadia delisted from the stock exchange and run as private companies. The part-share offer, giving a continued stake in the business, should help reassure investors that they are not selling short to a buyer with a reputation for bargain hunting.

M&S has seen sales of both clothing and food decline again over recent months, as the recovery programme initiated by chairman Luc Vandevelde falters. The company conceded this week that its latest recovery tactics, which include a store revamp programme spearheaded by general merchandise director Vittorio Radice, will take some time to make an impact.

The business is also vulnerable while it seeks a replacement for the departing Vandevelde, who is expected to take the chair at French retailer Carrefour later this year.

A formal bid would be certain to attract the interest of the competition authorities, but Green could argue that the intense competition from retailers ranging from Next and Debenhams to Asda and Tesco would continue to work in consumers' interests.

Green's move is likely to flush out any other potential bidders for M&S, which could include other retailers as well as private equity players. Despite its faltering sales, M&S remains the UK's biggest high street retailer and this week reported profits up by 6 per cent toGBP805m in the year to April 3, on turnover of around GBP8.3bn.