Woolworths has been in the UK for nearly 100 years
Troubled retailer Woolworths says it has rejected a bid for its network of 815 stores, calling it "unacceptable".
Woolworths confirmed reports that the boss of the Iceland frozen food chain, Malcolm Walker, had made an offer to buy its retail division.
However, the company's board said the proposal undervalued its assets and involved a complex restructuring, which was not achievable.
Woolworths has been a presence on UK High Streets for nearly 100 years.
Its first shop opened in Liverpool in 1909, but the business has run into trouble in recent years.
Last month, it said same-store sales fell 6.7% in the six weeks to 26 July.
Woolworths' chief executive Trevor Bish-Jones is stepping down in September and will be replaced by former Focus DIY boss Steve Johnson.
The statement by Woolworths came after news of the bid, believed to be worth tens of millions of pounds, was reported in several UK newspapers.
The reports said Mr Walker made the offer in a letter to Woolworths' chairman Richard North on behalf of a consortium including Icelandic group Baugur, which owns 10% of Woolworths.
Mr Walker wants to take control of Woolworths' retail outlets, but only if the firm agrees to cover its pension deficit, valued at £48.2m in its latest annual report, and retains its £142m debt.
Woolworths' statement said it was "unacceptable to the board" that the company should retain all pension liabilities for current and former employees, as required by the terms of the offer.
Woolworths said the indicative proposal "undervalued the assets of the company and potentially would have adversely impacted the group's existing funding arrangements".
The bid does not cover the firm's EUK business, which provides music and DVDs to other retailers, or its joint publishing venture with the BBC, 2 entertain.
Mr Walker began his career with Woolworths, but was fired in 1971, after bosses discovered he had been moonlighting to set up the frozen food business that became Iceland.
Mr Walker resigned from Iceland in 2001, following criticism over his sale of shares ahead of a profits warning, but returned to the firm four years later after he bought it with a Baugur-led consortium.