A thorn in Green's side

1 June 2004

Will the billionaire be able to hold his backers together if he has to bid higher now that the M&S old guard has been swept out? Only if he can really convince both his backers and M&S shareholders that he can create serious value.

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Marks & Spencer has appointed Stuart Rose as chief executive and Paul Myners as interim chairman. Rose replaces Roger Holmes, and Myners replaces Luc Vandevelde. Rose worked at M&S for the first 17 years of his career.

Philip Green last week said that he was considering a potential bid for M&S. The UK retail entrepreneur said that any proposal would involve a mixture of cash and shares in a new company that would seek a listing.

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. M&S 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.

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