'Tired' Green abandons bid for Marks & Spencer

Retail tycoon Philip Green dropped his planned £9.1-billion bid for Marks & Spencer, but left the door open for a fresh raid if the UK retailer's recovery plan runs aground.

Mr Green, the billionaire owner of BHS department stores and the Arcadia fashion group, abandoned his 400 pence-per-share proposal after Stuart Rose, head of Britain's biggest clothing retailer, steadfastly refused to open the books of M&S to him.

Angered by his defeat, Mr Green warned that he and his retail empire, which includes the BHS department stores and Top Shop, would remain a thorn in Mr Rose's side.

"They are going to have us breathing down their neck in every street and every shopping centre in the UK," Mr Green told BBC television. "Then we'll see who is the best retailer."

Mr Green's withdrawal, his second failed bid attempt on the British high street icon in four years, marks a victory for Mr Rose, the retail expert parachuted in by Marks & Spencer to fend off its Monaco-based predator.

But Mr Green, who had won the support of M&S's biggest shareholder, made it clear he hadn't given up hope on owning the clothing, food and homewares store as it battles to win back ground lost to rivals such as Next and Asda.

"Revival reserves the right to make or participate in an offer within the next six months in the event that the board of M&S agrees to recommend an offer or a third party announces a firm intention to make an offer for M&S," the bid vehicle said.

Mr Green, who confessed to feeling tired after the near seven-week campaign, said he wished Mr Rose the best of luck and said he was now "heading for the beach, where there are no phones."

"We've never had a meeting" (with M&S), Mr Green said in a telephone interview on the bid battle. "Do you think that is the way for people to behave, looking after other peoples' money?"

For his part, Mr Rose said he was focused on the road ahead. "The hard work begins now, and now we've got to deliver," he said.

Mr Rose said he would return £2.3 billion to investors in a share tender offer, sell the M&S Money financial arm and make annual cost cuts of £320 million by 2006/7.

Matthew McEachran, analyst at Investec, said. "From 350p downwards, we think there'll be demand from underweight institutions, who will see the potential upside in the business. Our assessment is that the shares might be worth up to 500p over the next 12 to 18 months".

Earlier on Wednesday, Mr Green said he had the support of a third of the holders of shares or derivatives in M&S for allowing him to look at the accounts.

That announcement followed a statement from M&S's largest shareholder, Brandes Investment Partners, which holds 11.7 percent of the company. Brandes also had called on M&S to engage in talks with Mr Green and open its books.

But M&S Chairman Paul Myners told the company's annual general meeting on Wednesday the board would not budge on its refusal to open the books, reiterating the charge that Mr Green's proposed bid undervalued the company.

Private shareholders at M&S's packed annual general meeting sided firmly with Mr Rose and his turnaround strategy, and the odds were stacked against Mr Green, who many analysts said boxed himself in by declaring his hand too early and committing himself to not raising the bid.

Mr Rose, fighting to reverse a decline in sales, told the shareholders' meeting he hoped sales would pick up in 2005/6.

"I would be very disappointed if we don't see like-for-like growth," he said. "Let's hope we can get some growth in the year 2005/6," he added.