M&S offers shareholders $4.26bn
 |  M&S was launching its fightback against Green's 400p a share offer. |
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LONDON, England -- Marks & Spencer plans to give £2.3 billion ($4.26 billion) back to investors and restructure its operations in an effort to persuade shareholders to reject a takeover bid from tycoon Philip Green.
The cash payback and proposed sale of its financial services unit, both announced Monday, are in response to Green's latest offer of £9.1 billion -- or 400 pence a share -- for the 120-year-old retailer.
Shareholders are expected to receive the equivalent of 100 pence a share through the payback scheme, while the sale of M&S Money to HSBC Holdings will generate £762 million and help fund the cash return to investors, the company said.
"The sum total of all this demonstrates that Philip Green's offer significantly undervalues the business," M&S Chief Executive Stuart Rose told reporters during a conference call Monday.
Investors reacted cautiously to the cash offer and restructuring plans.
Shares in M&S were up slightly at 368.5 pence in midday trading Monday in London -- after an initial decline following the company's announcement -- valuing the company at about £8.4 billion.
The stock was trading around the 290 pence before Green first announced his interest in May. Previous offers by Green -- owner of Britain's Bhs department stores and fashion chains Top Shop and Dorothy Perkins -- were rejected by M&S directors.
M&S -- with 375 stores and 66,000 employees -- is Britain's best known retailer of clothes, food and home wares.
 The M&S board say Green has undervalued the company. | |
Monday's changes are seen as an effort to boost the company's flagging performance and share price -- due to competition from other retailers such as Next, Asda and Tesco -- which has made it vulnerable to Green's takeover attempts.
In addition to the cash payback and M&S Money sale, the company said Monday it would buy the Per Una fashion brand for £125 million.
M&S also said it had revalued its property portfolio at £3.6 billion but said it had no current plans to sell any.
"The business has substantial further trading potential which will be unlocked through a return to the core values of quality, value, service, innovation and trust," Rose told reporters.
Immediate reactions from analysts were positive.
"Very punchy. Much bigger than expected profit forecast upgrades coming through I suspect and a brilliant bit of financial engineering on the sale of the financial services business and return of cash," Nick Bubb, of brokers Evolution, told Reuters.
