Mixed merchandiser seen as a good investment despite poor Christmas trading
The price of Woolworths' shares has leaped as much as 22 per cent, after speculation that it has been approached with an offer from Apax Partners.

The equity firm refused to confirm it is about to make an offer. However, in a report to the markets this morning, Apax said it was mulling a deal. The statement said: 'Apax confirms it is considering a possible offer for Woolworths Group. However, considerations are at a very early stage and there can be no certainty at all that any offer will be ultimately forthcoming. If a decision to proceed is made, it is currently Apax's intention to approach the board of Woolworths to seek a recommendation.'

News that an offer is on the horizon sent the retailer's shares into a flurry of activity, boosting the price to a month-high of about 50p a share. Evolution analyst Nick Bubb noted that Woolworths' share hike may also have been helped by separate speculation about an offer from Asda for Littlewoods stores. He said: '[Woolworths'] management should be able to engineer a useful profits recovery in 2005/2006 after a disappointing Christmas, via the loss elimination in the Big W out-of-town stores and through the roll-out of more 10/10 store refurbs. Woolies remains one of our tips for this year and we are moving from add to buy.'