 |
Finance News |
Woolworths Won't Hold Talks With Apax on Possible Bid (Update1)
Feb. 8 (Bloomberg) -- Woolworths Group Plc, the operator of more than 800 U.K. stores, said it won't hold talks with Apax Partners Worldwide LLP after getting a proposal from the private equity firm worth as much as 777 million pounds ($1.6 billion).
The proposal, worth 50 pence to 55 pence a Woolworths share, ``does not provide acceptable value or certainty to justify entering into detailed discussions with Apax,'' the London-based company said today in a Regulatory News Service statement.
The price is less than some analysts had expected after Apax, Europe's largest buyout and venture-capital firm, said Jan. 31 it was considering an offer for London-based Woolworths. Seymour Pierce analyst Richard Ratner earlier today raised his rating on Woolworths stock to ``outperform'' from ``hold'' on the view that an offer may take place at as much as 60 pence a share.
The shares rose 0.25 pence to 48 pence in London ahead of the statement, which came after U.K. stock trading ended. Woolworths shares fell 9.6 percent in 2004, retreating for a second year in three.
Apax's proposal is subject to a number of pre-conditions including access to the retailer's ``financial and trading information,'' according to Woolworths, whose stores sell goods from children's clothes to DVDs and video games.
Selfridges, Hamleys
Woolworths is the latest U.K. retailer to attract takeover interest after New Look Group Plc, Debenhams Plc, Selfridges Plc and Hamleys Plc were bought in the last two years. Buyout firms, which typically use loans to finance two-thirds of their takeovers, are attracted by the chains' property and cash flow. Apax was part of the group that acquired New Look last year.
The interest from Apax comes after Woolworths this month said annual profit will be about 10 percent less than analysts' estimates after same-store revenue was unchanged in December.
Chief Executive Trevor Bish-Jones spent 25 million pounds last year modernizing 50 Woolworths stores and has said he plans to revamp a further 75 in 2005 at a cost of 40 million pounds.
Woolworths, which was spun off from Kingfisher Plc in August 2001, is negotiating with potential buyers of some of its 21 Big W stores. Big W runs stores outside of city centers that stock as many as 55,000 different items including children's clothing, furniture and power tools, according to its Web site.
London-based Apax last year invested about 100 million pounds buying a 30 percent stake in New Look, the U.K.'s third- largest women's clothing retailer, which it owns jointly with Permira Advisers Ltd. and New Look's founder Tom Singh.
The company and Duke Street Capital Ltd. are due to share about 500 million pounds from selling Wickes Ltd., a U.K. supplier of building materials, to Travis Perkins Plc.
Buyout firms typically aim to boost a company's profit by changing managers or strategy before selling their holdings within five years to a new buyer or to investors in an initial stock sale. Buyout firms raise cash from institutional investors and use a combination of cash and loans to make purchases. The acquired company's cash flow pays down debt.
Source : Bloomberg - USA
|
|
