Green drops M&S bid
unveiled his plan for turning the company round this week, the
question on most people's lips was whether it would be enough to
stave off a possible bid from his arch rival Philip Green. The
answer, it appears, is yes.
Revival Acquisitions, the bidding vehicle owned by Green, has today announced that it will not now go ahead with a proposed £9 million for M&S after failing to receive sufficient support from the company's shareholders.
Rose's turnaround plan - which included the sale of the company's financial services arm, the closure of a number of spin-off stores, a revamp of its product range and, perhaps most importantly, returning £2.3 billion in cash to shareholders - was clearly enough to persuade shareholders not to support Green's bid at M&S' AGM yesterday.
But while shareholders gave their support to Rose, they will want to see more than a cash hand out, and the new management team will have to prove that it is up to the task ahead.
The board has certainly shown more mettle than might have been expected in fending off the possible bid from Green, consistently refusing to consider his proposal (even the last one, which valued M&S at well beyond its current market worth) and denying him access to vital financial information without which a formal bid could not be made.
Green had garnered support from some of M&S largest investors, representing 36 per cent of the company's shares, but this was ultimately not enough to force the board into considering his proposal. Nonetheless, it clearly shows that the level of discontent among shareholders is high, and is a sign that Rose's plan will be subjected to close scrutiny in the coming months.
Crucially for Rose, a number of other major shareholders rejected Green's bid because the £9 billion price tag was still too low - and indication that they believe a properly-functioning M&S is worth far more than that.
But such is Green's ego - and after all, it is hard to become a billionaire retail entrepreneur without a little chutzpah - that he could not resists taking some of the credit for the new-look M&S. "Philip Green believes that he has played an important part in bringing about a new direction for M&S," Revival said in a statement, before wishing the company's employees and shareholders "good fortune".
With the prospect of a bid finally disappearing, Rose will now be able to concentrate completely on implementing the much-needed changes at M&S. But a change of management with a grandiose strategy is not always the key to success - ask any Sainsbury shareholder and see - and the new M&S chief executive will have to draw on all his own chutzpah if he is to effect a lasting recovery.
