Shares in Marks & Spencer surged today on speculation that the high street retailer is an £8 billion bid target for Middle Eastern investors.
The stock jumped 8% at one stage, adding more than £500 million in value, after The Sunday Times said the Qatar Investment Authority (QIA), the Gulf state’s sovereign wealth fund, is in talks with private equity and banks about an approach.
Despite the scale of the share price movement, there was no official stock market announcement to confirm or deny the speculation.
A bid for the retailer would mark the biggest private equity takeover of a British blue chip firm since Alliance Boots was snapped up by US buyout firm KKR for £11 billion in 2007.
It would also see another British name fall into foreign hands after recent high-profile takeovers such as US group Kraft’s controversial acquisition of Cadbury.
M&S is often the subject of takeover speculation and there are significant hurdles for any such deal to get the go-ahead. Aside from the price tag needed to win over management and investors, M&S has a hefty pension deficit of about £300 million which means the scheme’s trustees have a significant say in any deal.
Other bidders have tried and failed to bag M&S in the past, with BHS and Topshop tycoon Sir Philip Green launching an unsuccessful hostile £10 billion bid in 2004.