Malcolm Walker the founder of the Iceland Frozen Foods Chain has made a bid for Woolworths Group Plc.
According to a release from London (Thompson Financial) yesterday Walker's offer effectively asks Woolworths to pay him to take the beleaguered retailer off their hands? It is understood that Walker has insisted on a number of conditions being imposed on the company including the board being required to retain most of the group's debt and retain all the pension liabilities, which believed to run in to tens of millions of pounds (currently under review).
The board, which were not available to comment, are reported to have stated that the bid is "unacceptable to the Board”.
Walker is thought to have teamed up with Woolworth’s largest investor Bauger Group which already holds a 12.2 percent stake and Ardeshir Naghshineh who owns (at the last notification) 10.2%.
The Former Chief executive of Focus DIY, Stephen Johnson, who is due to take the reigns on 1st September this year will be hoping that Woolworths battered shareholders do not force a deal that will prevent him the chance of turning around the company. Should a bid be done before Mr. Johnson's official appointment is is unclear whether his multi-million pound remuneration package would be payable?
Woolworth's shareholders, who have seen the value of their shares collapse over the last few years, will be heartened that Walker does not appear interested in Woolworths Group's valuable entertainment wholesale unit or their music and video publishing joint venture with the BBC and only wants Woolworth’s chain of chain's 800, or so stores.
In recent months there has been increasing speculation that Woolworth’s property portfolio and retail operations are damaging the company’s ability to develop the entertainment and wholesale arms of the business. If this is true there may be some merit in the Walker deal that should release value to Woolworth's shareholders, whether whether that be by a general rise in the share price, or by a special payment on the completion of the deal.
Having founded Iceland in the 70's and Malcolm Walker will undoubtedly have a joined-up plan for Woolworth’s retail division and any half hearted rejection of Walker's offer should not be taken brushed aside lightly by the board, or their shareholders.
Details of the bid headed by the former Iceland boss are expected this morning.