(Photo: Reuters)

Marks & Spencer shares rose sharply in early London trading following a weekend report in the Sunday Times newspaper that Britain's largest clothing retailer was a buyout of the Qatar Investment Authority. 

The investment arm of the Gulf state's sovereign wealth fund had sounded out partners to possibly mount an £8bn ($12.1bn/€9.3bn) bid for the group, the Sunday Times reported without saying where it go the information. It also suggested that the Qatar Investment Authority (QIA), a 26 percent shareholder in Britain's third largest grocer J Sainsbury, had spoken to lenders about financing and had consulted private equity houses - including CVC Capital Partners - in order to gauge their interest in the deal.

Marks & Spencer shares rose nearly 9 percent to 405.97 pence each in the opening minute of trading - the biggest single-day gain in four years - before paring the advance to around 5 percent after a report from the Reuters news agency, which cited an unnamed source, said the QIA was not considering a bid for the retailer.

Bloomberg reported in August of last year that CVC Capital had considered a bid for the Marks & Spencer, citing people close to the situation. The report said the bid may have included keeping some of the company's current senior management and lifted M&S shares to the biggest single-day leap at the time - 8.25 percent - in three years.  

In November of last year, M&S reached an agreement with its trustees to fund its pension deficit over the next ten years in a deal that could mean the 130-year old retailer may be sold to private investors.

The funding plan will see the company making annual contributions of around £28m over the next ten years in an effort to plug a £290m "black hole" at the high street retailer's defined benefit pension scheme - a huge decrease from the previous valuation of £1.3bn measured in March of 2009. A reduction on a previously agreed £60m contribution was also reached, the company said in a statement.

M&S is in the middle of a three year, £2.4bn restructuring under CEO Marc Bolland that aims to transition the group from a mainstay on Britain's High Street to a multi-chain, multi-channel international retailer.  First half profits rose to just under £300m, the company said on 6 November, although sales growth continues to be an issue in a highly competitive UK market. The group will report its next trading update on 11 April and its full year results on 21 May.

To report problems or to leave feedback about this article, e-mail:

To contact the editor, e-mail: