Woolworths rejects Iceland boss bid offer

Woolworths confirmed on Sunday that it had received a proposal by Iceland boss Malcolm Walker to acquire its 815-store retail division but said it had been rejected.

The Sweets-to-DVDs retailer said it rejected the approach on the grounds that it involved a complex restructuring "not achievable in practical terms" and undervalued the company's assets.

"It also required the company to retain all the pension liabilities for current and former employees of the retail business, which is unacceptable to the board," Woolworths said in a statement.

Earlier, the Sunday Telegraph reported that Mr Walker had made a formal approach for the chain's 815 stores, leading a consortium known to include Baugur, the Icelandic investment group that holds 10 per cent of the beleaguered retailer.

The consortium is interested only in Woolworths' stores, and not EUK, Woolworths Group's entertainment wholesale division, or 2 Entertain, its music and video publishing joint venture with the BBC, the paper said.

Woolworths, which named Steve Johnson as new chief executive last week following a profit warning late last month, said preliminary conclusions of the review into the group's business confirmed that there is a considerable opportunity to build a sustainable value retail proposition based primarily on its small- to medium- sized stores.