Bankers at a number of London institutions are looking at Marks & Spencer as a potential £6bn bid target as the retailer’s shares have slipped almost 50pc since their highs.
Bankers at a number of London institutions are looking at Marks & Spencer as a potential £6bn bid target as the retailer’s shares have slipped almost 50pc since highs in late 2007.
The Sunday Telegraph understands that bankers at institutions thought to include Bank of America Merrill Lynch have in recent weeks assessed the possibility of providing debt finance for a speculative bid.
Although it is understood neither bank has been mandated to pursue a specific course of action, the fact that they are looking at the retailer indicates the company’s predicament. Marc Bolland, M&S’s chief executive, has been criticised amid falling sales, particularly in women’s wear, and problems in the company’s supply chain.
One senior source went one step further, however, indicating that a large private equity institution – its identity unknown – had been actively considering a public-to-private takeover of the retailer.
The private equity house is so set on persuing a bid, the source said, that retail executives had been approached about backing some form of approach.
However, several sources pointed to the difficulty in mounting a takeover for M&S, despite its recent share price weakness. Shares closed at 341.1p on Friday night, valuing the company at £5.4bn. Any bid would need to be at a premium to the current price.
One banking source indicated that the banks looking at M&S were doing so because of a lack of corporate activity in the market. He added that the banks are currently investigating whether it is possible to finance such a leveraged bid, given that UK debt markets have remained closed to deals above £1bn.
M&S declined to comment.
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