Apax given Woolworths ultimatum

The global buyout firm has been given a one-month deadline to decide whether to make a formal offer for the UK retail chain.

The UK's Takeover Panel yesterday gave Apax Partners a deadline of noon on March 21st to make a second formal bid for UK high street retailer Woolworths. If the firm does not make an offer in time, it will be barred from bidding for the company for at least six months.
 
Apax's announcement of interest at the start of the month caused the price of shares in the company to rise by 9p to 49.5p. Despite the lack of progress since, the share price has remained in that region, the highest level since May 2002.
 
Two weeks ago Apax made a bid of 50p to 55p per share, valuing the company at between £718 million and £790 million. However, the company rejected the offer on the grounds that it did not provide 'acceptable value or certainty to justify entering into detailed discussions'.
 
Apax is being advised by Merrill Lynch. Woolworths is working with UBS.
 
Woolworths was founded in 1909 as a subsidiary of the US chain of the same name. Today it is a London Stock Exchange-listed high street retailer focusing on toys, confectionary and entertainment products.
 
The company first listed on the LSE following its August 2001 demerger from the Kingfisher Group. The company has since suffered from increased competition from supermarkets, and a 1.5 percent fall in Christmas sales recently led to a fall in profits.