Thorns of a dilemma

1 March 2007 By John Foley Follow @johnsfoley

Stuart Rose s hint at a bid for rival Sainsbury s and the speedy uturn suggest a tough choice for the UK retailer. A deal with Sainsbury s could, on paper, be the best thing for M&S. But it could also be the worst, not least for Rose himself.

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Marks & Spencer, the UK retailer, said it had decided not to bid for rival J Sainsbury – just hours after M&S boss Stuart Rose told press to "watch this space". The M&S board made its decision after Rose's comments were reported by Bloomberg, according to a person familiar with the situation.

"Assets like this don't come on the market very often," Bloomberg reported Rose as saying on Wednesday. "The company is effectively in play. Your shareholders would think you were an idiot if you didn't consider it."

M&S said it wouldn't bid for Sainsbury's within the next six months, except for in certain circumstances. One would be if another bidder, such as the private equity consortium stalking Sainsbury's, announced a firm intention to make an offer.

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