Retail

Sainsbury’s Peter Davis had to go

1 Jul 2004

The architect of the supermarket group s failed strategy was standing in the way of effective change. Now Justin King, the new chief executive, looks set for a radical review. This could be pretty painful, at least in the short term.

The M&S boss has tarnished his clean-cut reputation by buying shares just after receiving a call from Philip Green.

28 Jun 2004

The UK retailer s boss has tarnished his cleancut reputation by buying shares just after receiving a call from Philip Green. The reputational damage may, at the margin, harm M&S s defence against a possible bid from Green. The reputational damage may, at the margin, harm M&S s defence against a possible £8.4bn bid from Green.

Pension hole scuppers WH Smith buyout

23 Jun 2004

Permira s decision to walk away demonstrates the hidden powers of pension boards. It is also a timely reminder that indicative bids are not set in stone.

Corporate cash flow isn’t going into M&A

20 Jun 2004

Bankers had hoped the extra cash generated by European companies this year would be channelled into M&A. In fact, much of it is being directed towards share buybacks. That s no bad thing.

Tesco unscathed by food fight

18 Jun 2004

Price cuts in the supermarket sector haven't stopped Tesco increasing Q1 likeforlike sales by almost 8%. In spite of lower prices, Sainsbury and Safeway are still too expensive and they'll find it hard to cut prices enough to compete.

Green underwhelms on M&S again

17 Jun 2004

The retail billionaire's £8.4bn possible offer wasn't strong enough to force M&S to undress in front of a rival. It was right to reject it. After a second offer that doesn't make the grade, Green's assault is probably spent. But M&S mustn't be complacent. It has much work to do.

Pensions deficit threatens WH Smith bid

13 Jun 2004

In leveraged buyouts, the interests of pension fund trustees and financial sponsors could scarcely be further misaligned. There may still be scope for a negotiation. But deficits could emerge as possible dealbreakers in other retail LBOs.

M&S could be worth 450p a share

13 Jun 2004

That s what the embattled retailer could reach if it sold off noncore assets and turned around its core. M&S won t achieve that value today. But Philip Green, who is circling the group, will have to raise his game if he wants to buy it.

Philip Green needs to control himself

9 Jun 2004

Shooting his mouth off at every opportunity is stopping the UK retail entrepreneur from making progress with his putative bid for M&S. Green is considered to be a topnotch retailer. But if he is to run a public company, he will have to get a lot better at communicating.

Conflicts can be productive

7 Jun 2004

The decision to ban Freshfields from acting for Green in his battle for M&S is a sign of excess rectitude. For the modern economy to function, wellinformed professionals are needed. To be well informed, they need to have fingers in many pies.

Green will struggle to rubbish Rose

7 Jun 2004

That's because the retail billionaire tried to hire the new M&S boss to help with his own bid for the retailer. Rose rejected the offer because he didn't feel Green would give him real power. If Green wants to control M&S, he may have to let go a bit.

Green should offer M&S more equity

6 Jun 2004

Conventional wisdom is that the UK retail entrepreneur needs to offer more cash if he is to win the battle for M&S. But this is completely wrong. Green should offer more equity and less cash.

Is it good to be a minority investor?

6 Jun 2004

Yes, if the majority investor is a hardcharging entrepreneur. No, if it is a sleepy patrician family. That s the evidence from the UK s bluechips. It is highly relevant to the current battle for M&S.

M&S observes Macbeth rule in replacing the boss

6 Jun 2004

Speed is of the essence during takeover battles. Natwest took too long to dump its CEO in 1999 and lost its independence. The message wasn t lost on Paul Myners, the new M&S chairman. Having seen the NatWest disaster first hand, he acted fast.

Green makes unimpressive M&S offer

3 Jun 2004

The UK retail entrepreneur has made a proposal that doesn't look worth more than 330p360p a share. Green's offer is greedy. He could make hay while M&S shareholders got slim pickings. The offer won't fly as it stands.

M&S coup turns spotlight on Green financing

1 Jun 2004

Will the billionaire be able to hold his backers together if he has to bid higher now that the M&S old guard has been swept out? Only if he can really convince both his backers and M&S shareholders that he can create serious value.

M&S appoints new chairman and new CEO

30 May 2004

The embattled UK retail giant needed credible candidates in both roles to mount an effective defence against Philip Green. With former Arcadia boss Stuart Rose as CEO and City bigwig Paul Myners as interim chairman, M&S should give Green a run for his money.

Green concocts ballsy financing for M&S bid

28 May 2004

The entrepreneur is apparently looking to load it up with £5bn£6bn of debt. If Green can really pull this off, he could end up effectively controlling a £10bn enterprise with only £1bn of his own cash.

Retailers’ bondholders risk a mugging by LBOs

28 May 2004

As Philip Green s bid for M&S shows, onetime investmentgrade bondholders risk being subordinated to new highyield debt structures. The problem is inadequate covenants. Bondholders should negotiate better ones. A bid as big as Green s may spur them into action.

Philip Green swoops on M&S

27 May 2004

But since Green will seemingly be paying M&S shareholders mainly with their own cash and new shares, it is not a slam dunk. The UK entrepreneur has timed a possible £8bn assault on the struggling retailer well. M&S s chairman has quit and its CEO is on the rocks.