Shares in M&S rally on Qatari bid speculation

 
Kasmira Jefford
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SHARES in Marks & Spencer surged yesterday on reports over the weekend that Qatar’s sovereign wealth fund is plotting a takeover of the Britain’s biggest clothing retailer.

Investors piled into the stock, with shares closing 6.9 per cent higher at 398.1p last night on reports that the Qatar Investment Authority (QIA) was assembling a consortium to make an £8m bid.

A spokesperson for M&S said it would not comment on rumour or speculation while a source close to Qatar Holding, the investment arm of the Gulf state’s sovereign wealth fund, said it was not considering a bid.

Retail analyst Nick Bubb said the retailer could be vulnerable to a takeover. “The recent improvement in the debt markets and the amount of money sloshing around in private equity makes a bid possible, given the freehold property backing in the business,” he said.

However, analysts at Espirito Santo said that while owning stores was considered a valuable asset five years ago it is now “rather out of fashion” and that a sale and leaseback in the current market would be difficult.

The broker added that M&S has been “underinvested” and said the company would not be “an easy company to turn around”.

The retailer is no stanger to takeover approaches. In 2004 it fought off a £9.1bn bid from Topshop owner Philip Green and last year investment firm CVC was said to be eyeing a bid.