Consortium set to test Woolworths' resolve with second bid

Published on Tuesday 19 August 2008 10:42

THE consortium that was rebuffed following its approach for Woolworths is expected to make a second bid.

A consortium headed by Iceland founder Malcolm Walker had made an approach to acquire Woolworths' 815 retail stores.

Its initial approach, thought to be around 50 million, was rejected because it undervalued assets and involved a restructuring that Woolworths said was "not achievable". But now the consortium is thought to be trying to force directors to reopen negotiations.

The consortium includes investment firm Baugur, which has a ten per cent stake in Woolworths. It is trying to win the support of other investors to create a "bear hug" on directors.

Meanwhile, Woolworths is expected to announce next month that its pension deficit has doubled to nearly 100m.

A triennial actuarial valuation of the scheme is due to be completed and the deficit is expected to rise from 48.2m.

Chairman Richard North believes the struggling group can still be turned around.