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Marks & Spencer''s £2.3bn worth ''good return'' to investors |
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2004-7-14
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Marks & Spencer Group (M&S), the UK’s largest clothing retailer, informed it would return 2.3 billion pounds ($4.26 billion) to investors and sell its financial services arm in a bid to seduce shareholders and repel a 9.1 billion pound bid attempt.
Spelling out a strategy he hopes will see off an approach from Monaco-based tycoon Philip Green, Chief Executive Stuart Rose said the company would sell its financial services arm M&S Money to HSBC Holdings for 762 million pounds.
M&S will also make a tender offer for shares, to be priced at the end of next month that will effectively return stockholders, equivalent of 100p a share.
The Per Una range will be acquired from designer George Davies for 125 million pounds, and cost cuts in supply and distribution amounting to 250 million pounds in 2005/6 and 320 million in 2006/7 would flow down to the bottom line, Stuart Rose said.
"The sum total of all this demonstrates that Philip Green''s offer significantly undervalues the business," Rose, the former boss of Booker, Argos and Arcadia, said in an interview.
Shares in the company were off just 0.9 percent at 365 pence, valuing the 110-year-old firm at 8.4 billion pounds as investors took their time to digest the numbers. The stock was at 290 pence before Green revealed his interest on May 27.
"They''ve put a strong case forward," said Rupert Trotter at M&S shareholder Isis Asset Management.
"But what we have to work out now is whether these figures are achievable."
"This is not over yet, and it could run until midnight on Aug. 6," Rose said.
"We''re confident that the value we''re unveiling today will be significantly ahead of the numbers that have been talked about," he said in reference to Green''s 400 pence per share indicated offer.
Philip Green said he is waiting to see how the market reacts and thinks he will know within 48 hours whether M&S shareholders are backing the company or him. He said his offer is final and that he will not proceed without agreement from M&S.
A spokesman for Green said he was encouraged by feedback so far. "You can''t bank promises, most banks only accept cash." |
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