M&S targeted in share-buying spree

ICELANDIC investors have built up a 3% stake in Marks & Spencer, spending £170m on the shares in recent days, according to a report in today's Guardian newspaper.

Confirmation of the stake is expected within days, says the report.

M&S said it was unaware of the stake-building, but appeared to be relaxed, indicating that purchases of its 'undervalued shares' did not come as a surprise. The buying has helped underpin the M&S price in recent days despite reports that trading remains dire at Britain's biggest clothing retailer.

Some analysts fear that current sales could be down in double-digits, with some even suggesting a fall of 20%.

Chief executive Stuart Rose said that trading remained tough when he reported the group's 19% profits tumble last month, along with a further fall in market share. But he has refused to give an update on current sales until the annual meeting next month.

The Icelandic investors are not named but could include cash-rich banks Kaupthing and Landsbanki. Along with retail conglomerate Baugur, they have been at the forefront of the multi-billion-pound Icelandic invasion of corporate Britain in recent years.

Kaupthing, Iceland's biggest bank, last month made an agreed £547m bid for Singer & Friedlander, the merchant bank and investment company. Landsbanki, Iceland's second-biggest bank, snapped up stockbroking firm Teather & Greenwood in February for £43m.

Reykjavik-based retail conglomerate Baugur has already bought up a huge chunk of Britain's High Street, including Hamleys toy store, jeweller Goldsmiths, fashion chains Oasis and Karen Millen and Iceland frozen foods firm Big Food.

It is one of the bidders currently circling Somerfield and has stakes in a number of other retailers.