UK - Retail giant Marks and Spencer remains a takeover target and schemes will retain their holdings to capitalise on any future bids, a fund manager predicts.
The firm’s share price fell when billionaire Philip Green – who owns high street rival BHS – withdrew his 400p a share offer. Green claimed that over 25% of shareholders backed his proposal. But the offer – which was dependent on M&S opening its accounts to scrutiny – was withdrawn when the firm refused to comply.
Green launched his bid for M&S at the end of May, and one of the first stumbling blocks was the refusal of the M&S scheme trustees to meet with him.
Aside from M&S opening its books to Green, the bid also hinged on the firm providing detailed information about the scheme’s funding levels.Green’s bid boosted M&S’s share price from 280p in April to an 18-month high of 364p. The price slipped when the bid was withdrawn and further falls are expected.
But Gartmore cautious managed fund co-manager Brian Gallagher says Green’s bid has exposed just how vulnerable M&S is to a takeover. And, he believes that schemes will retain their M&S holdings in the short-to-medium term in order to capitalise on future takeover bids.
He said: “While Green has gone away for the time being, he has left the door open for a third-party approach. M&S is one of the biggest stocks in the market, and therefore pension funds will be very loath to have a zero weighting in the stock when there is likely to be corporate activity in the near future.”
Franklin Templeton portfolio manager Martin Cobb agreed.
“I would have hoped that M&S’s management would have at least had the courtesy to have a dialogue with Green. I’m disappointed that they haven’t done that,” he added.
PP has analysed the accounts of the biggest pension consulting firms and recorded the turnover (revenue) in their most recent accounts. The full leaderboard is below…
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