The struggling retailer confirmed that Baugur-backed Walker had made an individual approach for Woolworths that would have involved breaking up the 815-store group.
However, Walker was unwilling to take on the pension liability for present or former Woolworths staff. The variety store group said this was one of its reasons for rejecting the approach.
In a statement, Woolworths said that following a business review the board believes “there is a considerable opportunity for the group to build a sustainable value retail proposition based primarily on its small to medium-sized stores. The review has also highlighted opportunities for improved stock management in the areas of ordering, weeks of stock cover held and availability.”
Woolworths said that with new chief executive Steve Johnson at the helm, it was confident that a turnaround strategy could be found and implemented for its retail division.