Bankers prepare £4bn deal for M&S

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BANKERS are exploring debt packages to back a potential buyout of Marks & Spencer after being approached by a number of private equity buyers interested in a deal that will test the leveraged loan market’s liquidity capacity, loan bankers said.

Leveraged bankers have estimated that the buyout of M&S would need around £4bn of debt, evenly split between loans and bonds.

A £2bn loan would be the largest leveraged loan since the £9 billion loan backing KKR’s buyout of Alliance Boots in 2008.

Early-stage discussions have centred on the concept of debt size and structure, and lender appetite, so sponsors can assess whether they can make an offer for the Leeds-founded clothing and food chain.