Page last updated at 15:07 GMT, Monday, 18 August 2008 16:07 UK

Woolworths up on takeover talk

Woolworths store
Woolworths has been in the UK for nearly 100 years

Shares in Woolworths have soared after the struggling retailer said it had rejected a takeover bid for its network of 815 stores.

Woolworth described as "unacceptable" the offer from a group headed by the founder of the Iceland frozen food chain, Malcolm Walker.

But the news pushed Woolworths' shares up 15% to 7.62p in afternoon trading.

The homeware-to-computer games chain has suffered as the economic slowdown has hit consumer spending.

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.

'Assets undervalued'

Reports said the offer was on behalf of a consortium headed by Mr Walker and included Icelandic investment group Baugur, which has a 10% stake in Woolworths and also owns Iceland.

However, Woolworths' board said the proposal undervalued its assets and involved a complex restructuring, which was not achievable.

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.

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.


SEE ALSO
Woolworths turns down Iceland bid
17 Aug 08 |  Business
New boss for troubled Woolworths
12 Aug 08 |  Business
Sales slide again at Woolworths
29 Jul 08 |  Business
Head of Woolworths to step down
18 Jun 08 |  Business
Woolworths faces disclosure fine
12 Jun 08 |  Business

RELATED INTERNET LINKS
The BBC is not responsible for the content of external internet sites


FEATURES, VIEWS, ANALYSIS
Has China's housing bubble burst?
How the world's oldest clove tree defied an empire
Why Royal Ballet principal Sergei Polunin quit

BBC navigation

BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.

Americas Africa Europe Middle East South Asia Asia Pacific