A share deal too far at Marks

YOU have to hand it to Stuart Rose. His timing, like his dress sense, is exquisite. On May 7, with Marks and Spencer shares standing at a shade under 276 1/2p, Rose bought 100,000 shares.

On the same day, at 1.47pm, he took a call from his old mucker Philip Green, and the two retailers agreed to meet on May 12.

This was nothing unusual. Green and Rose often exchange phone calls, and there have been several attempts at arranging a sit-down, according to the Rose camp.

Rose had been looking to buy M&S shares for some days, and had asked his broker to let him know if there was a buying opportunity.

It was clear that the shares were not going to drop to the level that Rose had been hoping for, so an order for 100,000 went in on the afternoon of May 7.

M&S, we are assured by both sides, was not discussed in the course of the three minute, 20 second Green-Rose conversation. But what is clear is that M&S was extremely vulnerable following a disappointing trading statementon April 14. Rose at the time was a free agent, but was keeping his retail contacts up to date and had sought meetings with Luc Vandevelde, the then M&S chairman.

Rose also knew Green well enough to guess what the conversation might be about, given that confidence in M&S was at low ebb.

There also had been some speculation that Green might be interested in J Sainsbury.

But it would be astonishing if the thought had not crossed Rose's mind that Green - who had been repelled at the gates of Baker Street in 1999 - would not be considering a second tilt at M&S.

Rose, a wealthy man seeing an investment window, saw an opportunity on May 7 and dived in. But was this a sensible move? If in the back of Rose's mind there was even a hint that he might soon become more embroiled in M&S and could potentially be on the inside of a Green takeover attempt, he should have resisted the temptation to deal.

After all, he had shards of information about events at M&S and had been keeping himself in close touch with events.

The Financial Services Authority has no particular interest in the matter.

Rose has been given an easy ride over the confidentiality agreement he signed with Green, on the grounds that such undertakings are common place in private equity-venture capital deals.

But the combination of this and the share deal does raise questions about Rose's judgment.

It may be a matter of concern to the independent directors who parachuted him in as chief executive.

Euro shake-up

FUNDAMENTAL changes in the way economic policy is going to be conducted in the European Union, if and when the constitution really does come into force, were agreed in Brussels at the weekend .

You might think that the treaty was controversial enough already.

Yet the small print includes last-minute changes which will help France achieve one of its top objectives - closer co-ordination of economic policy among the euroland countries.

What happened at the summit ensures that the eurogroup, the shadowy and tightly-knit organisation which brings together the finance ministers of the 12 eurozone countries, is now destined to become much more powerful.

Instead of being the informal body it was when it was created in 1999 at the instigation of the French government, it will become an official institution of the EU.

As such it will, for example, have the legal right to make sure that the eurozone is represented at meetings of the International Monetary Fund and the World Bank.

The new constitution also provides for a strengthening of the eurogroup's formal role, and a weakening of the EU Commission, in votes on whether a eurozone country is breaching the terms of the Stability and Growth Pact.

France has, in effect, succeeded in its long-standing goal of creating a stronger political counterweight to the European Central Bank when it comes to the co-ordination of economic and monetary policy in Europe.

Britain, as a non-member of the club, will be even less able to influence key decisions.

In the unlikely event that the UK wants to join the single currency, it will have to agree to all sorts of economic policy rules and procedures which it has had no say whatever in establishing.

In effect, the new constitution raises the barriers to UK membership of the single currency.

Gordon Brown, never an enthusiast about Britain losing control of its currency and ability to set interest rates, may have to consider whether he now needs to revise his five tests to meet the new circumstances.