Former Iceland founder, Malcolm Walker sends in a proposal by letter for retail arm only
Woolworths has rejected a bid for the retail arm of the company from Iceland founder Malcolm Walker.

The bid for the 815 stores alone (Mr Walker does not wish to take the distribution (EUK) and publishing (2entertain) business) was rejected on three grounds, Woolworths said in a statement:

1. It involved a complex restructuring, 'which in practical terms is not achievable';
2. It undervalued Woolworths' assets, and would 'adversely affect funding arrangements';
3. It required the company retaining all pension liabilities for current and former employees – a measure 'unacceptable to the board'.

However, Woolworths rejection of the indicative proposal has not dissuaded the Iceland man.

Mr Walker - a former Woolworths management trainee - is reportedly keen to continue knocking at the high street retailer's door with the considerable backing of Icelandic investment group Baugur, which owns a 10% stake in Woolworths.

His bid could, according to a note from Altium Securities, attract board members who can see the value in a break-up of the group and wish to open talks with Walker.

Last week Woolworths unveiled former Focus DIY chief executive Steve Johnson as chief executive. His predecessor, Trevor Bish-Jones resigned as a director on Friday (August 15).