Former DIY chiefs assemble pounds 850m bid for Woolworths
Tuesday 01 February 2005
Roger Pedder, a former chairman of the Robert Dyas DIY and hardware chain, is understood to be fronting a planned takeover bid by Apax with Brent Wilkinson, the former Robert Dyas chief executive. Mr Pedder has a long history in retail and has also previously been chairman of the shoes retailer Clarks.
Apax confirmed it was considering a possible offer for Woolworths yesterday but said it did not intend to turn hostile on the general merchandise retailer.
Woolworths came out fighting with a statement designed to put a more positive spin on its recent poorly received Christmas trading statement. It also insisted that Woolworth's management, led by Gerald Corbett, the chairman, and Trevor Bish-Jones, the chief executive, were focused on delivering shareholder value.
The company's shares soared 22 per cent to finish the day at 49.5p, valuing the business at pounds 730m but still some way off the 60p-a-share being mentioned in City speculation as a possible offer price.
Mr Corbett said: "Over the past three years this management team, led by Trevor Bish-Jones, has doubled the profits, improved the operational performance of the business, developed a new retailing strategy and rolled out new store formats. We have nearly pounds 3bn of sales, improved retail margins and strong cash flow. The business is much stronger than at the time of the demerger."
Woolworths was split off from Kingfisher and floated in mid-2001 at 25p. It was the first retailer to announce its post-Christmas trading update in early January under new instructions from the Financial Services Authority (FSA). The regulator told retailers to report without delay any concerns over seasonal trading. Woolworths privately believes its decision to go first, in what has since been widely seen as one of the worst retail Christmases for decades, may have caused an unduly harsh reaction from the City in the light of subsequent trading statements from rivals.
Mr Corbett took the opportunity yesterday to reiterate that Woolworths had seen flat like-for-like sales in its stores over Christmas while margins improved. "Since then, January trading has been positive. Whilst our board will give proper consideration to any proposal that is made, we will continue to focus on the task of delivering the value inherent in Woolworths for the benefit of our shareholders," Mr Corbett said.
Apax's short statement confirming its interest in bidding for Woolworths puzzled observers who were also left questioning the rationale of a private- equity-financed bid for the group. Woolworths no longer has a portfolio of freehold property that most private-equity bidders would look for to help finance an acquisition.
The stores would represent valuable extra retail space to a supermarket group seeking growth such as Asda or Tesco. Analysts speculated this might by part of Apax's strategy; to auction leases to a number of the stores. Woolworths also owns other businesses such as the UK's biggest music wholesaler.
Apax said: "Considerations are at a very early stage and there can be no certainty at all that any offer will ultimately be forthcoming."
Analysts warned that Apax's interest in buying Woolworths was only an indicative expression of interest and that other recent private-equity forays into the sector had ended in no action being taken.
Steve Davies, of Numis Securities, said: "Holding out for 60p may be a little optimistic: mid-50s is probably a more realistic figure unless a rival bidder emerges."
- 1 BBC told new political editor must be 'impartial' with Nick Robinson reportedly stepping down
- 2 Number of young homeless people in Britain is 'more than three times the official figures'
- 3 Humans of New York image of crying gay teen receives best response yet from Ellen DeGeneres
- 4 The map showing the most dangerous tourist destinations in Europe, according to the Foreign Office
- 5 Swedish minister gives strongest case yet on why EU should stop turning away asylum seekers
BBC told new political editor must be 'impartial' with Nick Robinson reportedly stepping down
Isis propaganda video shows 25 Syrian soldiers executed by teenage militants in Palmyra
Number of young homeless people in Britain is 'more than three times the official figures'
Humans of New York image of crying gay teen receives best response yet from Ellen DeGeneres
The map showing the most dangerous tourist destinations in Europe, according to the Foreign Office
More Britons believe that multiculturalism makes the country worse - not better, says poll
Nathan Collier: Montana man inspired by same-sex marriage ruling requests right to wed two wives
Greece crisis: IMF was pushed around by Angela Merkel and Nicholas Sarkozy – and now it is being humiliated
Forget little green men – aliens will look like humans, says Cambridge University evolution expert
Girl, 7, stares down hate preacher at Ohio festival with pro-LGBT rainbow flag gesture
Osborne to cap family benefits at £23,000 – announced ahead of his post-election Budget
iJobs Money & Business
£15000 - £17000 per annum: Recruitment Genius: This company offers a range of ...
£15000 - £16000 per annum: Recruitment Genius: Customer Service Advisors are r...
£20000 - £25000 per annum + OTE £45K: SThree: SThree were established in 1986....
£40000 - £60000 per annum: Recruitment Genius: A Compliance Manager is require...