Retail entrepreneur Mr Philip Green has submitted the outline terms of a possible bid for Marks and Spencer.
Mr Green, whose empire includes BHS department stores and Top Shop fashion chain owner Arcadia, has proposed to pay £9 billion sterling for the group, including £1.05 billion of his own money.
Billionaire Green said he was prepared to pay 290p to 310p a share cash for Britain'ps top clothing retailer plus a 25 per cent stake in a new listed firm. In return, he wants the backing of M&S's board and answers to a list of questions, including latest trading figures and information on funding of the company's pension scheme.
M&S shares fell 3.8 per cent to 352p on disappointment that Mr Green had not pitched his bid higher.
"This is an opening salvo and falls short of what we think the shares could be worth," said Mr Rupert Trotter of M&S shareholder ISIS Asset Management. "We need to await developments."
The proposed offer comes just days after M&S announced sweeping boardroom changes. Respected retailer Mr Stuart Rose was recruited as CEO to replace Mr Roger Holmes, who paid the price for flagging sales.
Mr Green's legal team is deciding whether to fight an injunction barring its involvement in his bid for Marks and Spencer.
The High Court ruled in favour of the retailer by temporarily stopping legal firm Freshfields from advising him.
M&S argued there was a conflict of interest because it was a former client of Freshfields that had confidential information about it.