M&S and Sainsbury to lead UK stock market

12 Jul, 2004

The battle for retailer Marks & Spencer will again grab UK stock market headlines this week as the firm's new CEO, Stuart Rose, sets out his plans for revitalising the ailing business.
And elsewhere in the retail sector a controversial bonus package for the ousted chairman of supermarket chain Sainsbury will come up for vote at Monday's shareholder meeting.
Marks & Spencer's shares were the top blue-chip gainers on Friday as investors geared up for Monday's statement from Rose, with some anticipating it might include a return of cash to investors, possibly through a special dividend, and a revaluation of its real-estate portfolio.
On Thursday Britain's top clothing retailer rejected a 9.1 billion pound ($16.9 billion) take-over offer from retail tycoon Philip Green, saying it undervalued the company.
"With Philip Green breathing down his neck, Stuart Rose needs to put on a really good show on Monday, to justify M&S's view that 400 pence is too low an offer, but we expect him to be convincing and push profits back over one billion (pounds)," said Nick Bubb, analyst at brokerage Evolution Beeson Gregory.
"It's a question of what M&S has up its sleeve. We only know half the story at the moment. Unless the share price moves to over four pounds on Monday after the announcement of Rose's strategy, shareholders could easily be tempted to back the Green bid," said Paul Mumford, a fund manager at Cavendish Asset Management.
Investor appetite may be dampened by concerns about high oil prices, the resilience of the US economy and the start in earnest of the reporting season in the United States.
The FTSE share index dipped on Friday, resuming its downward trend that started in late June after a brief hiatus on Thursday that lifted it from a March low.
Elsewhere in the sector, food retailer Big Food Group is set to issue a trading statement, while St Modwen Properties is due to announce first-half results.
Shareholders' meetings at a host of companies, including music group EMI telecoms firm BT Group and the London Stock Exchange may serve up details on current trading.

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