Woolworths in turmoil after ‘scavenger’ bid

It’s been another eventful day for Woolworths, as the Financial Times labels the company

trying to buy the retailer for 1

a ‘scavenger’ – and Woolies’ biggest shareholder spits feathers over the potential deal.

Shares in the company plunged to an all-time low yesterday on news of Hilco’s takeover attempt. Stock dropped 38.3 per cent, or 1.46p, to 2.35p after being suspended yesterday morning to give the company time to release a statement announcing the talks.

The FT reports that Ardeshir Naghshineh, the Iranian developer who owns 10.2 per cent of Woolworths, believes the proposed deal was unacceptable.

"It’s ridiculous to sell the whole retail division for 1," said Naghshineh, whose Targetfollow company owns Centre Point tower in central London.

"We are obviously experienced in property," he said. "We know that it’s worth hundreds of millions of pounds. I know stores at the moment where landlords are prepared to give millions of pounds in premiums to get Woolworths out."

Woolies’ Board reportedly attempted a ‘salvage’ meeting last night, as Naghshineh admitted the company’s backs are against the wall”.

Meanwhile, the FT has run a profile piece on the man ‘leading a stricken bid’ for the company with a potential 1 buyout.

According to the paper Paul McGowan – who he owns substantial equity in Hilco – ‘goes where most investors fear to tread’.

It continues: ‘A host of distressed retailers – MFI, Focus DIY, Allders – have received his ministrations in recent years, but only when they were close to collapse.

‘As the driven chief executive of Hilco UK, a joint venture with Hilco of the US, he is respected and feared. "A scavenger," says one retailer of Belfast-born Mr McGowan, although he says it admiringly.

‘Considering the business he is in – sometimes putting retailers out of their misery, often putting them into administration before salvaging the best bits – he is affable and open.

‘He enjoys banter over dinner meetings with clients when in London and returns to Ireland every week to spend time with his family of three children. That does not mean that the boss of Hilco UK – he owns substantial equity in the venture – is ostentatious.

‘A trained accountant, the 46-year-old isn’t cut from the same cloth as most retail executives. The son of an asphalt roofing boss, he found a talent for numbers when helping the bookkeeper, and went to Ulster Polytechnic.

‘After a stint at KPMG in London, he was bored and went to a fashion business. During a stint closing the UK stores of Leslie Fay, he learnt about retail surgery.’