Global buyout firm Apax Partners has withdrawn its conditional £837 million ($1.6 billion; €1.2 billion) bid for Woolworths Group, the London-listed confectionery, entertainment and toy retailer.
Reuters cites a source close to the deal as saying that Woolworths had told Apax: “certain things were in the books, but when they did their due diligence, they were not there.”
At start of trading today shares in the company were down 29 percent at 39 pence, close to the level they had occupied before the firm announced its interest in the company in early February.
Woolworths rejected Apax’s initial bid of 50p to 55p per share, which valued the company at between £718 million and £790 million, on the grounds that it did not provide “acceptable value or certainty to justify entering into detailed discussions”.
The firm made its second offer of 58.2 pence per share on March 18th following an ultimatum from the UK’s takeover panel. Woolworths has said that it is still receiving interest in the units up for disposal.
Woolworths was founded in 1909 as a subsidiary of the US chain of the same name. 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.
In other news, the BBC listed Apax among 18 financial and trade buyers that had expressed an interest in its commercial subsidiary BBC Broadcast Ltd. Apax’ media advisory board includes Greg Dyke, the corporation’s former director general who quit the BBC in January 2004, following publication of the Hutton Report into the death of WMD inspector Dr David Kelly.
The BBC is currently undergoing a process of divestment of non-core commercial subsidiaries following an operational review last year. BBC Broadcast is responsible for distributing and promoting BBC content through multimedia channels including the internet and mobile phones.
Others potential private equity bidders include Barclays Private Equity, Bridgepoint, HgCapital, Exponent Private Equity, and the Carlyle Group.