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Tesco eyes $18B M&S bid?
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December 12, 1999: 11:07 a.m. ET
Report: supermarket giant examines offer for ailing Marks & Spencer
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LONDON (CNNfn) - Tesco, Britain’s largest supermarket operator, is considering an $18 billion offer for Marks & Spencer, the country’s largest clothing retailer, according to a report published Sunday.
Marks & Spencer has been surrounded by takeover speculation following a sharp jump in its share price last week. The company's stock has suffered months of decline prompted by a series of profit warnings and downbeat trading statements.
Tesco is viewed as a front-runner if a price can be agreed, and faces pressure from Britain’s Takeover Panel to clarify its intentions after hiring Credit Suisse First Boston to examine a possible bid, according to the London-based Sunday Business newspaper.
Marks & Spencer (MKS), which is also looking for a new chief executive after a series of boardroom squabbles, said Friday that it knew of no reason for the 17 percent surge in its share price Friday to just over 300 pence. The stock has fallen from around 400 pence at the start of the year.
CSFB is reported to have recommended that Tesco make any offer in the region of 380 pence a share in the face of possible competition from rival U.K. and overseas bidders. This would value M&S at just over 11 billion pounds ($17.8 billion).
Tesco (TSCO), whose shares closed virtually unchanged at the end of last week at 185 pence, has a market value of 12.6 billion pounds.
Other bidders may emerge
The rapid fall from grace of M&S, once one of Britain’s most profitable and best-respected retailers, has not stopped a host of other potential bidders being linked to the company.
The combination of Marks & Spencer’s strong brand name and prime city center locations has pushed U.S. giant Wal-Mart (WMT) into the frame alongside Knutsford, a new investment vehicle headed by Archie Norman, chief executive of Britain’s third-largest supermarket group, Asda, until its takeover by Wal-Mart earlier this year.
Sunday Business reported that Tesco is unlikely to make any bid until after M&S reports its results from the key Christmas shopping period.
Any bid inevitably would face stiff review by competition authorities. M&S is Britain’s sixth-largest food retailer, and regulators are conducting a review of pricing strategies in a sector transformed by consolidation over the past three years. 
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Marks & Spencer
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