Five questions answered on the Marks & Spencer buy-out rumours

Shareholders could block it.

New Statesman
Photograph: Getty Images

Due to real estate recovery a buy out of the UK retail chain Marks & Spencer has become increasingly more possible. We answer five questions on a possible future deal.

Why might Marks & Spencer be bought out?

According to The Telegraph, due to real estate recovery City insiders believe a buy out of the company could be ever more likely. They say a potential £2bn sale-and-leaseback deal for Marks & Spencer’s property portfolio could allow buyers to seriously run the rule over the company.

Is anyone currently considering investing?

Qatar is a contender, although it hasn’t shown any official interest, it is thought to have been approached.  Qatar has pledged to heavily invest in the UK and already has a 29.9pc stake in Sainsbury’s.

What are the experts saying?

One expert that was not named told The Telegraph:

“If you raised £2bn through a sale-and-lease-back you would need £2bn of equity and about £4bn of debt,” they said.

 “In theory it could be possible now – but there are still lots of issues.”

What issues are there to consider?

Marks & Spencer has a high number of retail shareholders who could block any deal. It also has a £290m pension fund deficit and its long-term strategy has been known to struggle in recent years.

How much are the retail company’s shares currently worth?

On Monday morning they rose to 8.5 per cent.