THE Huddersfield man who founded the Iceland frozen food chain has launched a surprise bid for Woolworths retail arm.
Malcolm Walker is heading a consortium that has made a formal approach to Woolworths chairman Richard North about acquiring the chain’s 815 stores.
The group includes Icelandic investment group Baugur, which holds a 10% stake in Woolworths.
Mr Walker, who is currently chief executive of Iceland, is thought to have offered “tens of millions” of pounds for the under-performing division. The consortium is reportedly not interested in acquiring EUK, Woolworths entertainment wholesale division, or 2 Entertain, its music and video publishing joint-venture with the BBC.
Mr Walker, who hails from Grange Moor, founded Iceland more than 35 years ago.
Woolworths’ retail business has been battered by competition from supermarkets and internet retailers.
The group saw like-for-like sales fall 6.7% in the six weeks to July 26, with margins under pressure because a greater proportion of trade came from CDs and DVDs, rather than higher margin outdoor products and clothing.
Under the deal, Mr Walker would run the chain as a going concern. But reports said he was only willing to proceed if the Woolworths board agreed to retain most of the group’s debt and wipe out its pension deficit.
At its financial year end on February 2, Woolworths’ net debt was £124 million. And according to Woolworths’ annual report, it has a pension deficit of £48.2 million, but this is due to be revalued.
These figures could suggest that the consortium is effectively asking Woolworths to pay it to take the stores off its hands.