UPDATE 1-Britain's M&S shares rise on report investment firm Apollo examined bid

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LONDON, Nov 22 (Reuters) - Shares in Marks & Spencer
rose as much as 3.8% in early trading after a report in The
Sunday Times said U.S. investment firm Apollo Global Management
has been "running the rule" over the British clothing
and food retailer.

The newspaper cited "city sources" as saying Apollo
considered M&S a bargain, with the group's shares unreasonably
weighed down by the impact of the COVID-19 pandemic and the
market failing to attribute enough value to M&S's 50% stake in
Ocado's retail business.

The Sunday Times said it was unclear whether Apollo's
interest had been dampened by the recent surge in M&S shares -
up 33% over the last month.

M&S and Apollo declined to comment on the report.

The stock was up 3% at 248.3 pence at 0859 GMT, extending
year-on-year gains to 87%.

Earlier this month M&S beat forecasts for first-half profit
and upgraded its earnings outlook for the second time this year,
sending its stock soaring on bets that one of Britain's most
elusive corporate turnarounds could finally materialise.

Last year, Apollo missed out on buying Asda, Britain's No. 3
grocer, which was taken over by the Issa brothers and TDR
Capital. This year, it considered joining the bid battle for
Morrisons, the No. 4 supermarket chain.

Morrisons was eventually taken over by private equity group
Clayton, Dubilier & Rice (CD&R).

Reports this year also linked Apollo with Sainsbury's
, Britain's second largest supermarket group after Tesco
.

Analysts played down the prospect of a bid for M&S, noting
no bidders emerged when its shares were languishing at 121 pence
in December 2020 and the impractical nature of splitting up the
group's food and clothing businesses.

M&S's share price rise could propel it back into Britain's
bluechip FTSE 100 index, a status it lost in 2019.
(Reporting by James Davey; Editing by William Schomberg and
Edmund Blair)