Another M&S takeover bid reported

Marks and SpencerMarks & Spencer is reportedly being eyed for takeover by Middle Eastern investors plotting an ambitious £8 billion bid.

Qatar Investment Authority (QIA), the Gulf state's sovereign wealth fund, is in talks with private equity groups and banks about approaching the high street chain, according to The Sunday Times newspaper.
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M&S shares have surged in recent days amid rumours of a bid for the group, with stock up 4% since Wednesday.

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.

But 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 around £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. Private equity firm CVC, which owns Formula One, is said to have considered a bid for M&S last summer but pulled out after its plans were made public.

The takeover spotlight has once more fallen on M&S with its faltering sales in recent years. Chief executive Marc Bolland is leading a turnaround plan to revive its performance but progress is slow because of difficult high street conditions. It reported its first fall in profits for three years in 2012 and followed this with a dismal performance in clothing over Christmas. Overall like-for-like sales in the UK fell 1.8% in the 13 weeks to December 29 after a bigger-than-expected 3.8% slump in general merchandise.

Mr Bolland is hoping a new clothing management team, which includes ex-Jaeger boss Belinda Earl, will start to deliver when their first collections hit the shops in July. But M&S shares have taken a hammering, down 70% in the last year alone, making the firm an attractive takeover target.

QIA, which was not immediately available for comment, is no stranger to the UK retail sector. Its Qatar Holding subsidiary bought Harrods three years ago for £1.5 billion and it has a 25% stake in supermarket Sainsbury's. It also has the financial firepower for such a deal, although it is believed to be keen to tie up with private equity funds to reduce its risk.

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Another M&S takeover bid reported

Administrators sounded the death knell for Woolworths in December 2008, leading to store closures that left 27,000 people out of work. Since its collapse former Woolworths stores have become a blight in many town centres and more than 100 of the large stores still lay vacant in January 2012.

Loyal customers didn't have go without the family favourite store for long however as it reappeared online as Woolworths.co.uk in 2009, after Shop Direct Home Shopping bought out the Woolworths name.

The greetings cards specialist became the latest highstreet casualty in May with 8,000 jobs on the line when it was forced it into administration. Its biggest supplier, American Greetings, then bought Clintons out of administration and put the retailer through a rebrand including a new logo and complete in-store revamps.

Its contemporary format includes new fixtures and fittings and easier to navigate stores, and will be rolled out to all 400 UK stores at the cost of £16million. Bosses aim to bring the brand back to profit within two years.

Poor sales in the run up to Christmas was the final nail in the coffin for several struggling chains, including lingerie retailer La Senza, which went bust in January 2012 with 146 shops and 2,600 staff. Kuwaiti retailer Alshaya bought part of the business, which saved 60 shops and 1,000 staff.

La Senza has been struggling in a similar way to other specialist shops such as Game and Mothercare, which have been hit by cut-price competition at supermarkets and have no alternative products to help shoulder losses.

Stricken retailer Blacks Leisure, which employed 3,600 staff across 98 Blacks stores and 208 Millets stores, went into administration in Janurary 2012 after failing to find an outright buyer.

Soon after its stores were bought by sportswear firm JD Sports in pre-pack deal - an insolvency procedure which sees a company being sold immediately after it has entered administration – which saw most of Blacks' £36 million of debt wiped out.

Fashion chain Bonmarche, which was part of the Peacock Group, was sold in January when the group collapsed due to unsustainable debts, resulting in 1,400 job losses and 160 store closures. Private equity firm Sun European Partners bought 230 stores, which continue to trade with 2,400 staff.

Peacocks collapsed under a £740 million net debt mountain in January 2012 in the biggest retail failure since Woolworths. Despite being sold out of administration to Edinburgh Woollen Mill in a deal that saved 380 stores and 6,000 jobs, administrators from KPMG were forced to close 224 stores with immediate effect. This lead to 3,350 redundancies from stores and Peacocks head office in Cardiff.

The high street name continues trading as bosses work to stabilise the situation, yet a further blow was dealt this month with news that the firm's pension fund is in £15.8 million shortfall as a result of the collapse.

Game buckled under its £85m debt pile in March 2012 and was placed into administration after being unable to pay a £21m rent bill. Administrator PwC immediately closed 277 shops, with the loss of 2,000 jobs. Soon after, investment firm, OpCapita bought 333 Game stores, saving more than 3,000 jobs.

Game's demise followed a string of profit warnings and the failure of nervous suppliers, including leading names Electronic Arts and Nintendo, to go on providing the latest games, further damaging poor sales.

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