FT: Woolworths Sale Unlikely

Potential bidders for troubled UK retailer Woolworths have voiced significant concerns about a sale of the company’s brand and part of its retail and distribution business reaching a conclusion, at least in 2008.

A source told The Financial Times that the complexity of the Woolworths group’s leases and restocking of stores have made a deal increasingly unlikely. The retailer’s wholesale arm, EUK, has faced difficulties in resuming supply deals with distributors.

Deloitte was appointed as administrators for Woolworths at the end of November. The FT said that Deloitte is hoping to find a solution this week, although no offer deadline has yet been set.

The administrator was understood to have been inundated by offers at the beginning of the month, with approximately 10 bidders considered to be serious contenders. Rival retailers are expected to bid for individual stores, with US computer game retailer GameStop already tipped as a bidder for up to 400 of Woolworths’ 815 individual stores.

Turnaround specialist David Buchler is reported to still be involved in the bidding process, but UK entrepreneur Theo Paphitis has already ruled himself out of the running.

Source: Thomson Merger News