Woolworths’ stores could soon be broken up

Dec 1 2008 by Aled Blake, Western Mail

WOOLWORTHS could be broken up as early as this week as around a dozen serious bidders circle the high street chain.

Parts of the group’s 815 store portfolio could be sold off in parcels to rival retailers, despite administrator Deloitte receiving several bids for the entire group.

A number of high street chains are understood to have expressed interest in the group’s outlets, many of which have planning permission to sell food, including supermarkets such as Tesco, Sainsbury’s, Asda and Iceland, discount stores Wilkinson and Poundland, and other retailers including Boots and New Look.

Property agent CB Richard Ellis, which is acting for Deloitte, is expected to start selling some of the stores in the next few days, while interest continues to remain high.

Meanwhile, Dragons’ Den entrepreneur Theo Paphitis is reported to be among around a dozen serious potential bidders for the chain, as is Ardeshir Naghshineh, who with a 10% stake in Woolworths was the company’s biggest shareholder.

Mr Paphitis, who met Deloitte on Friday, is understood to be focusing on the group’s high street business, although his interest in Woolworths was yesterday said to be “tentative”, according to one Sunday newspaper.

He made his fortune by turning around companies including Ryman the Stationer, the Contessa and La Senza lingerie chains, and Partners the Stationer.

But it was his role on the BBC series Dragons’ Den which brought him to the public’s attention as one of a panel of venture capitalists willing to invest their own money in exchange for equity in schemes pitched by would-be entrepreneurs.

He is reported to be considering disposing of key leases to rival retailers to raise £150m.

Mr Naghshineh was said by another Sunday newspaper to be putting together a deal team and financing package over the weekend for the whole group, including its Entertainment UK division, which distributes DVDs and CDs.

Tony Page, the former Asda director who runs the stores division at Woolworths, is also thought to be working on a bid with other members of the management.

Other groups reported to be interested in acquiring Woolworths include private equity firms Cerberus and Sun European Capital.