British retailer Woolworths jumps on bid approach

Private equity firm Apax Partners said yesterday it was considering a takeover bid for British toys-to-sweets chain Woolworths Plc, sending shares in the retailer over 20 per cent higher.

At 0900 GMT, Woolworths shares were up 22.2 per cent at 49-1/2 pence, valuing the 100-year-old business at about £711 million.

"Apax confirms that it is considering, on behalf of a new company to be established by funds advised by it, a possible offer for Woolworths," Apax said in a brief statement.

"However, considerations are at a very early stage and there can be no certainty at all that any offer will ultimately be forthcoming," it added.

Apax said it would seek the support of Woolworths's board for any offer.

Woolworths was not immediately available for comment. Private equity firms have bought a string of British retailers in recent years, taking advantage of low borrowing costs to buy businesses which have started to struggle amid a slowdown in consumer spending growth.

"They're looking at it at a time when management credibility has been slightly damaged by the Christmas outcome," said industry analyst Nick Bubb.

Woolworths said earlier this month that same store sales at its general stores were flat in the four weeks to January 1 due in part to a difficult toy market and piracy hitting DVD sales.