The Bookseller.com

1st December 2008

Woolies turns down store offer

18.08.08 Philip Jones

Woolworths has rejected a bid from Iceland for its retail business. Woolies said the offer "undervalued the assets" and involved a complex restructuring. The bid also required the remaining business, mainly its distribution and wholesale business EUK, to retain all the pension liabilities for the current and former employees of the retail business. Woolies said this was "unacceptable".

According to the FT, the bid was in the low tens of millions of pounds. The bid is being backed by Iceland's parent Baugur, a 10% shareholder in Woolworths and a long-standing advocate of splitting the three divisions, is backing Malcolm Walker, who is chief executive of the Iceland supermarket chain, to run the business. If Baugur is successful with the bid it is likely to rebrand some stores under the Iceland banner.

Just last week Woolworths appointed a new c.e.o. Steve Johnson: it has also embarked on a review of its business.

According to the Times, the rejection sparked an angry reaction from investors in Woolworths, who have seen its shares plunge by more than 80% since the start of last year to as low as 5.4p last month. The shares closed on Friday at 6.65p.

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