Marks and Spencer jumps on takeover speculation

Shares in Marks and Spencer jumped on Friday afternoon on rumours that private equity titan CVC Capital Partners is considering a takeover offer for the High Street group.

It is thought that CVC is looking at an bid and has approached executives both inside and outside the firm "about a possible management role under private equity control," according to Bloomberg which has spoken to unnamed sources close the matter.

Shares in M&S fell the day before as analysts at Santander said that the company would be too expensive for private equity funds or sovereign wealth funds given its £8.2bn enterprise value.

Try 6 free issues of MoneyWeek today

Get unparalleled financial insight, analysis and expert opinion you can profit from.

Start your trial

Sign up for MoneyWeek’s free twice-daily newsletter.

Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.

Join more than 165,000 subscribers and keep yourself informed with latest financial news, insights and expert analysis to help you understand what really matters when it comes to your finances.

Sign up

"While we agree that M&S has a strong brand heritage, we do not believe that there would be an appetite at current levels," a Santander analyst was quoted as saying.

At today's prices, M&S's market capitalisation is around £5.9bn.

The firm reported last month that like-for-like sales slipped by 0.7% in the 13 weeks to June 30th as falling general merchandise revenues offset strength in the food division.

Shares have dropped steadily since hitting a 52-week high of 389.5p in March, but have picked up in recent weeks on the back of takeover speculation.

Before the close today, the stock was trading at 367.6p, up 3.11% on the day.