UK food and clothing retailer Marks & Spencer has rejected a proposed takeover offer for the group from retail entrepreneur Philip Green.

“The board considers that the proposal significantly undervalues the group and its prospects and therefore rejects the proposal,” the company said.

Many shareholders said the bid, estimated by some to be worth as little as £7.5bn (US$13.8bn), fell short of the value they had been hoping for.

In the days since Green said he was preparing a bid for Marks & Spencer, the company has appointed a new chief executive, Stuart Rose, replacing Roger Holmes with immediate effect.

“Following the appointment of Stuart Rose as chief executive on 31 May 2004, the management team is currently in the early stages of re-examining all aspects of its business in order to maximise value creation for its shareholders,” the company said.

Green, who has said he has secured £9bn worth of finance to fund a takeover, is said to be considering his options after the board’s rejection of his proposal, reported Reuters.