Philip Green Rules Out New Bid for Marks & Spencer
By Paul Jarvis Feb. 22 (Bloomberg) -- Billionaire Philip Green said he's notconsidering renewing his interest in Marks & Spencer Group Plc,the U.K.'s largest clothing retailer, seven months after hewithdrew a proposed bid worth 9.1 billion pounds ($17 billion). ``I've got bored with all the rumors and discussion on aweekly basis,'' Green, 52, said today in an interview. ``We're notworking on it, and we've got no intention of working on it.'' Green's statement means he is barred under U.K. takeover lawsfrom making an offer for London-based Marks & Spencer for at leastsix months unless another bidder emerges. The owner of U.K. chainsincluding Bhs and Dorothy Perkins, Green abandoned his previoustakeover attempt in July after failing to gain the support of theretailer's board led by Chairman Paul Myners. Shares of Marks & Spencer fell 4 pence, or 1.1 percent, to363.5 pence at 11:50 a.m. in London, giving the company a marketvalue of 6 billion pounds. The stock is little changed since Greenended his 400 pence-a-share takeover attempt on July 14. According to Green, the U.K. retail market has become morecompetitive since he withdrew his last proposal. ``I don't think the market has got any easier in that time,''Green said. ``It's getting much more aggressive, and everybody ishaving to feed money back into pricing. Costs are rising, andthere are still big issues around pensions. The next six months atleast is going to be very tough.''
New Clothes
Marks & Spencer last month said annual profit will be lessthan expected as Chief Executive Stuart Rose slashed prices toclear inventory. Revenue at stores open at least a year fell 6percent in the fiscal third-quarter, the company said. Rose, 55, is adding new ranges, cutting prices and refittingstores to regain customers. The company had a ``very positive''response from customers to its new fashions, he said last week. Green said fund managers are ``scared'' of selling U.K.retail stocks because of concern they may miss a takeover. ApaxPartners Worldwide LLP, Europe's largest buyout and venturecapital firm, last month said it is considering making a bid forWoolworths Group Plc, the operator of more 800 U.K. stores. ``I see the market totally differently to all the noise outthere,'' Green said. ``Institutions are scared to sell for thewrong reason, because they're worried they might miss something onthe table from someone else. I don't believe ultimately there willbe a lot of activity'' among publicly traded retailers.
Debt Insurance
Marks & Spencer spokeswoman Sue Sadler declined to comment onGreen's statement. She also wouldn't comment on a report in theGuardian newspaper that a South African financier named MarkPaulsmeier may make a 10.5 billion-pound bid for Marks & Spencer.The Guardian cited Paulsmeier, who says he has private-equitybacking and will fly to London Monday to advance the transaction. Nick Bubb, an analyst at Evolution Securities in London,described the newspaper's report as ``bizarre.'' The annual cost of insuring 10 million euros ($13.2 million)of Marks & Spencer debt for five years fell 5,000 euros to 86,000euros at 9:30 a.m. in London, Deutsche Bank AG's credit-defaultswap prices show. The company has about 2.5 billion euros of bondsoutstanding, according to data compiled by Bloomberg. Mark & Spencer's debt insurance costs have fallen more than40 percent since regulatory restrictions preventing Green frombidding, were lifted. Green made his fortune fixing U.K. retailers such as Bhs.Advised by Merrill Lynch & Co., he raised 11.1 billion pounds lastyear to acquire Marks & Spencer, including more than 1 billionpounds of his family's money. He had previously considered makingan offer for the business in December 1999. Rose returned to Marks & Spencer after 15 years away from thecompany he started with as a trainee store manager in 1971. Hepartly owes his job to Green, as he was hired four days after thebillionaire first said he may bid. He replaced Roger Holmes. Marks & Spencer, whose 375 U.K. stores serve about 10 millioncustomers a week, was founded in 1894 when Michael Marks, aRussian-born Polish refugee, formed a partnership with EnglishmanTom Spencer. Its customers have included Queen Elizabeth II andformer Prime Minister Margaret Thatcher.
New Clothes
Marks & Spencer last month said annual profit will be lessthan expected as Chief Executive Stuart Rose slashed prices toclear inventory. Revenue at stores open at least a year fell 6percent in the fiscal third-quarter, the company said. Rose, 55, is adding new ranges, cutting prices and refittingstores to regain customers. The company had a ``very positive''response from customers to its new fashions, he said last week. Green said fund managers are ``scared'' of selling U.K.retail stocks because of concern they may miss a takeover. ApaxPartners Worldwide LLP, Europe's largest buyout and venturecapital firm, last month said it is considering making a bid forWoolworths Group Plc, the operator of more 800 U.K. stores. ``I see the market totally differently to all the noise outthere,'' Green said. ``Institutions are scared to sell for thewrong reason, because they're worried they might miss something onthe table from someone else. I don't believe ultimately there willbe a lot of activity'' among publicly traded retailers.
Debt Insurance
Marks & Spencer spokeswoman Sue Sadler declined to comment onGreen's statement. She also wouldn't comment on a report in theGuardian newspaper that a South African financier named MarkPaulsmeier may make a 10.5 billion-pound bid for Marks & Spencer.The Guardian cited Paulsmeier, who says he has private-equitybacking and will fly to London Monday to advance the transaction. Nick Bubb, an analyst at Evolution Securities in London,described the newspaper's report as ``bizarre.'' The annual cost of insuring 10 million euros ($13.2 million)of Marks & Spencer debt for five years fell 5,000 euros to 86,000euros at 9:30 a.m. in London, Deutsche Bank AG's credit-defaultswap prices show. The company has about 2.5 billion euros of bondsoutstanding, according to data compiled by Bloomberg. Mark & Spencer's debt insurance costs have fallen more than40 percent since regulatory restrictions preventing Green frombidding, were lifted. Green made his fortune fixing U.K. retailers such as Bhs.Advised by Merrill Lynch & Co., he raised 11.1 billion pounds lastyear to acquire Marks & Spencer, including more than 1 billionpounds of his family's money. He had previously considered makingan offer for the business in December 1999. Rose returned to Marks & Spencer after 15 years away from thecompany he started with as a trainee store manager in 1971. Hepartly owes his job to Green, as he was hired four days after thebillionaire first said he may bid. He replaced Roger Holmes. Marks & Spencer, whose 375 U.K. stores serve about 10 millioncustomers a week, was founded in 1894 when Michael Marks, aRussian-born Polish refugee, formed a partnership with EnglishmanTom Spencer. Its customers have included Queen Elizabeth II andformer Prime Minister Margaret Thatcher.
