Apax must 'put up or shut up' for Woolies

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The Independent Online

The private equity group stalking Woolworths was given a one-month deadline yesterday to decide whether to make a formal offer for the retailer.

The private equity group stalking Woolworths was given a one-month deadline yesterday to decide whether to make a formal offer for the retailer.

The Takeover Panel told Apax Partners it had until 21 March to "put up or shut up". It intervened after Woolworths' advisers, UBS, asked it to set an ultimatum in an attempt to force Apax's hand.

Woolworths' board rejected a bid approach from Apax worth 50p to 55p per share earlier this month on the grounds that it undervalued the group's prospects. It said the indicated range, which valued the group at between £718m and £790m, failed to provide "acceptable value or certainty".

Despite Woolworths' refusal to allow Apax to conduct due diligence, its shares have hovered close to 50p, suggesting that the market believes the group's stalker will return. Yesterday its shares slipped 0.25p to 49p. Apax, which demanded full access to Woolworths' financial and trading information as part of its pre-conditions, declined to comment.

Richard Ratner, an analyst at Seymour Pierce, said: "As Apax needs to carry out due diligence before making an offer it is unlikely that the Woolies board will open the books at less than 60p. Our view remains that, on balance, Apax will raise its indicative price."

Yesterday the Takeover Panel said: "Following discussions with both parties' advisers, the panel executive has ruled that Apax must, by 12 noon on Monday, 21 March, either announce a firm intention to make an offer for Woolworths under rule 2.5 of the code or announce that it does not intend to make an offer."

Should Apax, which is being advised by Merrill Lynch, opt to walk away, it will be barred from making a fresh bid for Woolworths for at least six months, the panel added.

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