Green stalks

28 May 2004 By Hugo Dixon

The entrepreneur is apparently looking to load it up with £5bn£6bn of debt. If Green can really pull this off, he could end up effectively controlling a £10bn enterprise with only £1bn of his own cash.

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Philip Green said the financing for his possible bid for Marks & Spencer was virtually in place.

The entrepreneur is good for up to £1bn of equity, according to a person familiar with the situation. His associates, including Goldman Sachs and close friends, may put in about another £800m. It isn't yet clear whether Merrill Lynch, which is advising Green alongside Goldman Sachs, will put in some equity as well.

The UK retailer currently has £2bn of net debt. Its land and buildings have a book value of £2.1bn, according to the group's 2003 accounts. The Green camp reckons M&S's property may actually be worth £5bn£6bn, according to a person familiar with its thinking.

Other banks that are providing financing for Green's bid are Royal Bank of Scotland, Bank of Scotland and Barclays.

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