M&S stands firm on due diligence
New strategy to realise greater value, says Myners
The board of Marks & Spencer has made a stout defence of its decision not to co-operate with the potential bid from Philip Green.
Addressing shareholders at the M&S annual meeting, chairman Paul Myners said the M&S board still believes that the 400p-a-share cash offer made by Green’s bid company “continues to undervalue the group and its prospects significantly”.
He added that the board “is confident it will have demonstrated this to shareholders” when chief executive Stuart Rose set out his strategy for the company at the start of the week.
Myners said: “We believe it would be wrong for the board, believing that 400p per share significantly undervalues the Company, to allow due diligence access. Bear in mind that Revival Acquisitions cannot increase its proposal following due diligence – it can try to reduce it.
“Some people have asked whether we are depriving shareholders of choice. If a bidder disagrees with a board’s view on value, the usual way for a bidder to offer shareholders a choice is for the bidder to make a formal offer to shareholders directly. This route was open to Revival and it has chosen not to take it.
“We have also been asked what it would take to grant Revival due diligence access. To do this we would need to be persuaded that your board’s views about the future of Marks & Spencer and our belief in its value are misplaced.”
[img r]M&Sstorefront.jpg[/img]Despite rising profits, Myners acknowledged that “the business has not performed as well as it should have. Our sales growth faltered during the second half and we lost market share in several core segments. Our product proposition in a number of important areas failed to meet the high standards expected by our customers.”
Praising Rose’s track record, and despite what he described as “a sustained campaign to impugn his reputation and undermine his authority as chief executive,” Myners said: “Stuart’s background meant he picked up the reins very quickly when he arrived six weeks ago. He has wasted no time. Many important actions have already been taken and a whole programme of significant change is under way.”
While Rose has not yet received any share options due to the potential offer, Myners said that “to underline Stuart’s confidence in the future value of Marks & Spencer, he has undertaken to donate to charity any profit between the grant price of his options and 400p.”
