Qatar Not Considering Bid For Marks & Spencer – Source

Qatar Holding, the investment arm of the Gulf state’s sovereign wealth fund, is not considering a bid for British retailer Marks & Spencer, a source close to the fund said on Monday.

Shares in Marks & Spencer (M&S) jumped eight per cent in early Monday trading after The Sunday Times newspaper said the Qatar Investment Authority wanted to assemble a consortium to mount an £8 billion ($12.1 billion) takeover of Britain’s biggest clothing retailer.

Qatar Holding is the vehicle through which the wealth fund conducts some of its biggest overseas investments.

M&S declined to comment.

Despite the denial from the source, some analysts think M&S, whose core women’s clothes business has been losing market share, could be vulnerable to a private equity bid.

“Trading and profits are under pressure, with nothing to show yet for the big investments made in online systems and warehousing and the changes in the clothing team,” said independent retail analyst Nick Bubb.

He also noted that from a funding perspective, the recent improvement in the debt markets and the amount of money currently in private equity makes a bid possible.

“From a strategic perspective, however, the question is what anybody thinks could be done with a declining brand like M&S.”

One of M&S’s top 20 shareholders also told Reuters a private equity-style bid was possible.

“You could argue that the business could support quite a bit of debt if it wasn’t having to pay a dividend,” said the investor.

Shares in M&S were up 5.4 per cent at 393 pence at 0905 GMT.