London Woolworths Group plc said that it rejected a purchase proposal from Baugur Group Hf, an investment group and shareholder based in Reykjavik, Iceland. The company is still open to negotiations with the firm, according to a Reuters report.
"The Woolworths board is not unwilling to talk to Baugur but was unwilling to recommend the bid it made," a Woolworths spokesperson told Reuters on Tuesday.
The retailer’s board rejected the ?50 million (US$93 million) bid on Sunday because it involved complex corporate restructuring, and under-valued the company’s assets. Also, it expected Woolworths to retain all pension liabilities for current and former employees, according to a company statement.
The Woolworths chain, which sells appliances, housewares and video games, is suffering from sharply declining sales. Its full-year profit in 2007 was only half of its earnings for 2006.
If Woolworths eventually agrees to do business with Baugur, the investment group plans to rebrand Woolworths’ stores under its Iceland banner, a supermarket chain that specializes in frozen produce.