M&S investors reap £2bn windfall

THE 358,000 private investors in High Street retailer Marks & Spencer are to share in a £2bn windfall under details announced today.

M&S is returning the money to shareholders under a complicated scheme which will allow investors to decide when they want to take their money.

Rather than opting to buy back shares on the open market, the retailer has decided to return the £2bn by reducing the size of its capital by 20%.

Existing shareholders will be given less shares in a new holding company, 17 for every 21 they own, but will hold the same percentage stake in the business.

They will also receive a number of B shares they can cash in at 70p each.

The first opportunity to sell the B shares is in March, with the next chance in September, and at six month windows thereafter.

Plans for the £2 billion windfall were first announced in March last year as part of chairman and chief executive Luc Vandevelde's recovery plans.

M&S has since pulled out of Europe, sold a business in the United States, and raised cash through a sale and leaseback deal on its stores.

Trading at the retailer has also begun to improve, reflected last week by strong sales figures over the key Christmas and New Year period.

Today, Mr Vandevelde said the return of cash would give M&S a more efficient balance sheet and allow for a faster rate of earnings growth.

He added: 'Our objective was to treat all shareholders in the same way. The proposals achieve this and give them a choice as to when to receive cash.'