M&S: Revolt looms over bid snub

STORES group Marks & Spencer is facing a shareholder revolt against its continued refusal to open talks with Philip Green, with some leading shareholders understood to be considering requisitioning an extraordinary general meeting to force the board to reconsider.

This follows M&S's rejection of the Bhs tycoon's 'final' 400p-a-share offer yesterday, with the promise that prospects for Britain's biggest clothing retailer are brighter under the leadership of new chief executive Stuart Rose.

Green has made it clear he will not go ahead with a formal offer unless he gets the backing of the board. M&S's largest shareholder, Brandes Investment Partners, which holds 11.7%, and 1.2% shareholder Schroder Investment Management, have said they will support Green's £9.1bn offer. More shareholders are said to be coming on board, giving Green a level of support of about 20%.

The deal can only go ahead if the M&S board recommends it but the stalemate looks likely to be broken by disgruntled institutional shareholders, who are increasingly unhappy that M&S has failed to give more than a cursory hearing to Green.

Green was taking calls from a number of leading shareholders yesterday. They made it clear that they will listen to what Rose has to say in his crucial strategy statement on Monday but, should they fail to be impressed, they will be demanding a reversal from the M&S board.

If the traditional behind-the-scenes persuasion fails, some are indicating they are prepared to go public by calling an extraordinary general meeting.

Apart from Brandes, which Green has been courting for the past two weeks, yesterday was the first time he talked personally to M&S's key shareholders, an indication he is not prepared to go down without a fight.

The Green camp is convinced there is nothing Rose can produce on Monday that will persuade the City that M&S shares can climb to 400p under Rose's stewardship.

Any promises the M&S chief executive makes will be scrutinised in the light of his track record, with not everyone in the retail sector convinced he has the ability to turn the group round.

Amelia Morris, the senior analyst at Brandes, is thought now to be taking a close look at Rose's past achievements at Booker, Argos and Arcadia.