“The Qatar Investment Authority was said to be assembling a group of private equity investors to make an £8bn swoop on the retailer. The Sunday Times said the Gulf state’s sovereign wealth fund had approached several large private equity firms to gauge their interest and spoken to banks about financing an offer, citing senior City sources.Trading in M&S shares surged last week as rumours of a bid swirled around the City. More than 11m shares changed hands on Thursday, nearly three times the normal daily volume, and the share price finished the week almost 3% higher at 372.5p. It is thought the retailer could command a price of around 500p per share, or £8.1bn.If the Qataris succeed, M&S would become the latest in a string of high-profile British companies to fall into foreign hands, after the US group Kraft bought Cadbury’s, and Spain’s Ferrovial swallowed the airports group BAA.Analysts say M&S is vulnerable to a bid after a string of disappointing sales updates. The company had a dreadful Christmas, with like-for-like sales of general merchandise – which includes clothing and other non-food items – dropping by almost 4%. That dragged overall like-for-likes down by 1.8% and caused many to question the future of the chief executive, Marc Bolland, at the retailer.The retailer was hit by speculation last summer that it could be the target of a takeover bid because of its struggling performance. Reports suggested that the UK-based private equity group CVC, which tried to buy Sainsbury’s in 2007, was behind the bid, but that it had shelved the project after its plans became public.CVC is said to be among the groups the Qataris have approached about backing a bid this time around.Qatar has already demonstrated its interest in British retail, buying Harrods three years ago. In 2007 a proposed takeover of Sainsbury’s came to nothing, but Qatar still retains a 26% stake in the supermarket group.The group, which was set up to spend the Gulf state’s vast oil wealth, is said to be well-equipped to raise the funds to approach M&S alone. But it is keen to form a consortium with a western private equity fund, to give it more clout in conversations with management and investors.Marks & Spencer and the Qatar Investment Authority declined to comment”
Date:3/19/2013
Source:www.mrketplace.com