Marks & Spencer shares surged on Monday on speculation that a faltering turnaround effort and flagging profits have left Britain’s biggest clothing retailer vulnerable to a takeover.
Investors piled into the stock after a newspaper reported that the Gulf state of Qatar was planning a bid, sending the shares up 9.4% to a 12-month high. A source close to state-owned Qatar Holding denied the report, but the stock was still up 7.4% at 1130 GMT.
Analysts and investors said Marks & Spencer (M&S) could be a target for a private equity firm.
The company, which also sells homewares and food, traded poorly in 2012 and in January reported a bigger-than-expected drop in non-food like-for-like sales for the Christmas quarter.
“M&S is vulnerable to a bid, as trading and profits are under pressure, with nothing to show yet for the big investments made in online systems and warehousing and the changes in the clothing team,” said independent retail analyst Nick Bubb.
M&S declined to comment.
The Sunday Times newspaper had said the Qatar Investment Authority wanted to assemble a consortium to mount an £8-billion ($12.1 billion) takeover.