Following the announcement that private finance firm Apax Capital Partners had withdrawn its potential offer of 58.2p a share, Woolworths' share price plunged 25 per cent, even though the retailer promised to increase the share dividend by 10 per cent on last year.
Elliot Associates said: 'We strongly urge the board to consider the implementation of a strategy of returning cash to shareholders.'
The letter put forward the following suggestions:
·'A formal auction of the entire company
·The disposal of the Entertainment UK and 2entertain assets, followed by an efficient return of the disposal proceeds to shareholders
·Levering up the balance sheet and returning cash to shareholders, such as cash to include a significant portion of the (unexpectedly) large cash balance at January 31, the net proceeds from the disposal of the Big W sites and the net proceeds of the sale of MVC, if consummated.'