Apax Partners yesterday confirmed rumours circulating in the press last weekend that the firm is considering a bid for the publicly listed UK retailer Woolworths.
The firm was quoted in the Financial Times as saying: 'Considerations are at a very early stage. If a decision to proceed is made, it is Apax's intention to approach the board of Woolworths to seek a recommendation.'
The newspaper reported that Apax has teamed up with retail executices Roger Bedder and Brent Wilkinson to work on a possible bid.
The announcement caused shares in the company to rise by 9p to 49.5p yesterday. The 22 percent increase, resulting in a total valuation of £700 million, marks the highest share price for the group since May 2002.
Woolworths was founded in 1909 as a subsidiary of the US chain of the same name. Today it is a high street retailer focusing on toys, confectionary and entertainment products.
The company was first listed on the London Stock Exchange following its August 2001 demerger from the Kingfisher Group, when its share price was 26p. The company has since suffered from increased competition from supermarkets, and a fall of 1.5 percent in Christmas sales recently led to a fall in profits.
Woolworths emphasised in a statement on Monday that 'preparations are at a very early stage.' Gerald Corbett, the company's chairman, noted that the company's profits have doubled over the last three years and that January's trading has been positive despite flat Christmas sales.