Belfast Telegraph

Thursday 24 July 2014

M&S shares jump 8% on Qatar takeover rumours

Shares in Marks & Spencer have surged on speculation that the high street retailer is an £8bn bid target for Middle Eastern investors.

The stock jumped 8% at one stage yesterday, adding more than £500m in value, after The Sunday Times said the Qatar Investment Authority (QIA), the Gulf state's sovereign wealth fund, is in talks with private equity and banks about an approach.

Despite the scale of the share price movement, there was no official stock market announcement to confirm or deny the speculation.

A bid for the retailer would mark the biggest private equity takeover of a British blue chip firm since Alliance Boots was snapped up by US buyout firm KKR for £11bn in 2007.

It would also see another British name fall into foreign hands after recent high-profile takeovers such as US group Kraft's controversial acquisition of Cadbury. M&S is often the subject of takeover speculation and there are significant hurdles for any such deal to get the go ahead.

Aside from the price tag needed to win over management and investors, M&S has a pension deficit of about £300m which means the scheme's trustees have a significant say in any deal.

Other bidders have tried and failed to bag M&S in the past, with BHS and Topshop tycoon Sir Philip Green launching an unsuccessful hostile £10bn bid in 2004.

Private equity firm CVC, which owns Formula One, is said to have considered a bid for M&S last summer but pulled out after its plans were made public.

Chief executive Marc Bolland is leading a turnaround plan to revive its performance but progress is slow due to difficult high street conditions.

M&S reported its first fall in profits for three years in 2012 and followed this with a dismal performance in clothing over Christmas.

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