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.'