Woolworths up on takeover talk

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.