M&S: Boss lied in takeover battle

STUART Rose, the new chief executive of Marks & Spencer, lied repeatedly to Philip Green in an attempt to thwart the billionaire entrepreneur's plans to buy the High Street retailer.

The disclosure that Rose, with support from the M&S board, deliberately misled Green about his impending appointment to the top job at M&S will cast further doubt about his judgment as boss of a FTSE 100 company.

Rose is already under investigation by the Financial Services Authority for buying M&S shares shortly before turning down an offer from Green to join his team bidding for M&S.

He is expected to be interviewed under caution by lawyers from the FSA's enforcement division.

An M&S spokesman said Rose had done nothing wrong and would not resign.

Rose bought 100,000 shares in M&S within 90 minutes of taking a phone call from Green on May 7 asking him to a meeting five days later. There had already been stock market speculation that Green was preparing a takeover bid.

At their meeting, Green made Rose 'an insider' to his plans to bid for M&S and offered him a job, an offer the billionaire is said to have boasted 'could have been worth £250m'.

Rose did not tell Green of his share purchases, even though he spent several days discussing the offer.

He is also believed to have suggested that Green, owner of Bhs and Arcadia, should employ Charles Wilson, Rose's right-hand man and now a senior executive at M&S.

Rose told Green he had not been contacted by M&S at a meeting the day after he was approached about the chief executive's job by Kevin Lomax, an M&S director, and hours after he had breakfasted with incoming M&S chairman Paul Myners. He repeated this in a phone call two days later, hours before his appointment as chief executive was made public.

A spokesman for M&S justified Rose's decision to lie to Green because of the need for 'complete surprise' in the group's defence against a potentially hostile takeover bid.

The M&S board endorsed this tactic. 'It was vital to us that Green continued to believe that he [Rose] hadn't been offered the job,' said the spokesman.

Friends of Green maintain he already knew of the approach from Lomax to Rose from a mutual friend.

Rose is not alone in being investigated by the FSA. Others who bought shares before Green's bid plans emerged on May 27 have been targeted. The FSA would not comment on the scope of its investigation but said its enforcement lawyers usually interview people under caution. This happens when the FSA believes a crime may have taken place.

THE City's richest man bought £5.5m worth of shares in M&S the day after meeting the businessman now at the centre of an insider share-dealing investigation, the Sunday Times reported today.

Michael Spencer, who runs the London broking firm Icap and has a personal fortune estimated at £330m, bought 2m shares on May 11. That was a day after he had lunch with Stuart Rose who has since been made chief executive of M&S.

Sixteen days after Spencer‘s share purchase, Philip Green unveiled a bid proposal for M&S. It sent the company‘s share price flying, giving Spencer a paper profit of £1.7m.