Marks shrinks investors' stakes

LIKE IT or not, most of stores group Marks & Spencer's 350,000 shareholders will finish up with a smaller stake in the company after the complex so-called £2bn cash hand back and scheme of arrangement that was supposed to benefit smaller investors.

In reshaping its share structure the company is giving every investor 17 new ordinary shares for every 21 they already own. They will also get 21 B shares, but these are likely to be sold immediately for 70p apiece. Because of the complicated sums involved the numbers for most investors will not work out exactly. Very few are likely to hold a number of shares which can be divided exactly by 21.

Despite so many small and loyal investors being affected no one at M&S' press office or investor relations department could explain what would happen to the odd shares left over. 'Full details of the offer will be sent to shareholders on 4 February,' a spokesperson said.

So over to Cazenove, the blue-blooded bankers who put the deal together. Their reputation is one of not showing concern for the more humble investor. 'Those odd amounts will be sold and a cheque sent to the shareholder,' was the terse message.

But what if shareholders would rather round up their holding rather than see it rounded down? 'There will be no choice, the odd shares will be sold and a cheque sent,' was the uncompromising answer.

That means most investors will be left with a fractionally smaller stake in M&S than they originally held - and just as the company appears to be on the point of recovery.