Woolworths suspends shares amid rescue talks

Wednesday, 26 November 2008 12:00

Woolworths has suspended its shares on the London Stock Exchange as the group attempts to rescue the business.

The group is still in talks with an unnamed buyer for its retail arm and confirmed speculation it is in talks with the BBC for the sale of its 40 per cent stake in joint venture 2 Entertain.

"Whilst discussions in relation to such sales are being pursued with vigour, terms have not yet been agreed.

"Both sales are subject, amongst other things, to the approval of the group's lending banks," Woolworths said in a statement to the stock exchange.

The company has suspended trading in its shares on the London Stock Exchange pending the outcome of the discussions.

It has been reported the company is in talks with turnaround specialist Hilco, which is prepared to take on around £300 million of the company's debts for a nominal payment of £1.

Analysts believe Woolworths faces going into administration by the end of the year without a deal.

However, one of the company's largest shareholders, property tycoon Ardeshir Naghshineh, has asked Woolworths to reconsider the deal and sell some of its stores instead.

In addition to the retail arm and the 2 Entertain joint venture, Woolworths owns distribution business Entertainment UK.

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