Page last updated at 08:44 GMT, Wednesday, 26 November 2008

Woolworths shares are suspended

Woolworths store
Woolworths has had a presence on the UK High Street for almost a century

Shares in troubled retailer Woolworths have been suspended as the firm continues talks to rescue the business.

Woolworths said in a statement that it was in discussions over the potential sale of its 840 stores.

The firm added that it was also in talks to sell its 40% stake in publisher 2 Entertain to BBC Worldwide, which already owns the other 60%.

It warned that both deals needed the backing of its banks, and "there can be no assurance" they would be completed.

BBC Worldwide is the BBC's commercial arm. It confirmed that it was talking to Woolworths over the possible purchase of the retailer's 2 Entertain holding.

Woolworths share price graphic

Significant debts

Restructuring firm Hilco is said to want to buy the stores, but has so far refused to comment on the speculation.

WOOLWORTHS FACTS
Unknown Woolworths store, 1955
First UK store opened in Liverpool in 1909
Has 840 stores across the UK
Owns 40% share of publisher 2 Entertain
Owns distribution business Entertainment UK

According to reports, Hilco has offered to buy the shops for 1, but so far cannot reach agreement on how much of Woolworth's 385m debt it will take on.

Without some form of a deal, analysts say Woolworths faces the real risk of going into administration.

However, earlier this week the firm's largest shareholder - property tycoon Ardeshir Naghshineh - called on Woolworths to delay plans to sell the parts of the business.

Instead Mr Naghshineh said the firm should instead look at making money by selling of some of its outlets.

Long history

Shares in Woolworths have fallen by more than 90% over the past year as concerns over its future have risen.

In September, the firm reported a record first-half pre-tax loss of 90.8m and scrapped its dividend to shareholders.

In August, it rejected a takeover bid of 50m for its 815 stores from a group headed by the founder of the Iceland frozen food chain, Malcolm Walker.

BBC business editor Robert Peston warned earlier this week that up to 20,000 of the 30,000 jobs at Woolworths were now at risk whatever the outcome for the firm.

In addition to the Woolworths stores and its 40% stake in 2 Entertain, the company runs distribution business Entertainment UK.

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SEE ALSO
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24 Nov 08 |  Business
What is the point of Woolworths?
21 Nov 08 |  Magazine
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19 Nov 08 |  Business
Woolworths up on takeover talk
18 Aug 08 |  Business
Woolworths turns down Iceland bid
17 Aug 08 |  Business
New boss for troubled Woolworths
12 Aug 08 |  Business

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