Woolworths should ignore a potential bid from Iceland founder Malcolm Walker and focus on reviving its retail chain, the company's biggest shareholder, Ardeshir Naghshineh, has said.
Mr Naghshineh – an Iranian property investor worth an estimated £500m – is said to be considering his own bid. He owns 10.2 per cent of Woolworths Group and his opposition to a takeover is likely to be a blow to Mr Walker's ambitions. He said: "I would prefer [Woolworths] to turn the company around. There's a lot of value in the company and they have got to be able to unlock that."
Earlier this month, Richard North, Woolworths' chairman, hired Steve Johnson, the former chief executive of DIY chain Focus, to lead a turnaround. He starts work tomorrow and is expected to reveal his plans by Christmas.
Mr North rejected a £50m bid approach for Woolworths' 815 stores from Mr Walker and Baugur, the Icelandic investment group which already owns a 10 per cent stake. However, he is under pressure from shareholders to hold talks with Mr Walker who it is thought is to be prepared to improve his offer.
Woolworths' board described the conditions attached to the first approach as "unacceptable".
Mr Walker's controversial offer suggested that Woolworths' parent company retain the £124m debt and wipe out its £8m pension deficit. He is not interested in EUK, the group's entertainment wholesale division, or 2 entertain, its publishing joint venture with the BBC.
Mr Walker was expected to meet Mr North last week, but it is understood that no meeting occurred and none is planned.
Mr Naghshineh says Mr Walker's bid was "negative". "If he parks the pension fund deficit with Woolworths and doesn't take any debt, how is that good for the rest of the shareholders?" he asked.
Woolworths' shares rose 2.25 per cent on Friday to 7.26p, 13 per cent up on the share price before news of Mr Walker's bid became public.Reuse content