M&S: Bosses come out fighting

PHILIP Green is refusing to accept defeat in his £9.1bn battle to take control of Marks & Spencer despite overwhelming support for Stuart Rose and the new M&S management team at today's annual meeting.

Although chairman Paul Myners faced some critical questioning about M&S's poor track record and 'rewards-for-failure' payments to the previous top team of Luc Vandevelde, Roger Holmes and Vittorio Radice, the mood of the shareholders was clearly with the board in its rejection of Green's proposed 400p-a-share offer.

But there was no vote on the bid and, as the meeting progressed, the Bhs and Arcadia tycoon was working away behind the scenes, talking to major institutional shareholders in an effort to sign them up to his offer.

'Of course I haven't given up,' said Green, who plans to continue wooing M&S's institutional shareholders despite the board's refusal to open the books or recommend his offer.

He appeared unconcerned that the mood of the M&S meeting was squarely behind chief executive Rose.

'It doesn't shock me that the private shareholders who turned up there were loyal to the board,' he said.

Green was critical of how the meeting was conducted: 'Of the 40 questions listed, they allowed only 21, and they selected what they wanted. They did not take one institutional question.'

Just hours before shareholders gathered at the Royal Festival Hall, Green was given a significant boost as M&S's largest single shareholder, Brandes Investment Partners, cast doubt on M&S's recovery plans and called on it to open its books to the Monaco-based billionaire.

The US firm, which holds 11.7%, said it had discussed key aspects of the Rose revival strategy with the group and that it 'recognises the positive steps outlined by M&S, including the sale of M&S Money and the planned return of capital'.

But, it continued: 'Brandes takes a conservative view regarding the timing, achievability and retention for shareholders of the margin and cost benefits outlined by M&S.

'Accordingly, Brandes believes it would be in its clients' interests to have an opportunity to consider a formal £4 cash offer from Revival Acquisitions Limited. Brandes has expressed its views to M&S and has indicated its continued support for due diligence discussions between M&S and Revival.'

Green was jubilant at the eleventh-hour intervention of the powerful American shareholder: 'We think other shareholders will take their lead from Brandes. It's not exactly a vote of confidence in M&S, is it?' he said.

With Brandes on side, Green now has the support of 17.5% of the ordinary shares. Schroder Investment Management is also backing him but only if the board recommends his offer. Holders of another 8% are also on side but these are held through derivative contracts, which do not always carry voting rights.

However, the board is under no obligation to talk to Green, and Myners and Rose maintained that they have no intention of doing so.