Woolworths has rejected a bid for its chain of 815 stores.

Beleaguered retailer Woolworths has confirmed it has rejected a bid from frozen food chain Iceland, stating that the offer is “unacceptable”.

In a statement, the company described the offer as undervaluing its assets, as well as involving a complex and unachievable restructuring proposal.

Woolworths also named the proposal that it retains the pension liabilities of its current and former employees as a reason for the snub.

According to newspaper reports, the bid to take over Woolworths’ 815 stores is believed to be worth tens of millions of pounds.

Woolworths has been operating on UK high streets since 1909, however it has experienced financial difficulties in recent years. In July, the Group posted a 6.7% decline in like-for-like sales.

Woolworths’ Chief Executive, Trevor Bish-Jones, stepped down in June after six years’ service with the company and will be replaced by former Focus DIY boss, Steve Johnson.

Woolworths is optimistic about his appointment and said that it expects him to: “lead the implementation of the turnaround strategy for the retail division and the recovery and growth of the Woolworths Group as a whole.”

The takeover proposal is being led by Iceland boss Malcolm Walker who previously worked for Woolworths, but was fired in 1971 when it was discovered he was planning to set up his own business, which eventually became Iceland.

Walker left Iceland in 2001 amid criticism over his sale of shares ahead of a profit warning, however he bought the company back four years later as part of a consortium led by Baugur investment group.

Shares in Woolworths have risen – peaking at a 15% increase – as investors await Walker’s next move.

More information can be found by visiting: www.woolworthsgroupplc.com

By Natasha Piscitelli