Woolworths today rejected a bid for the company worth tens of millions of pounds
The retailer described the offer from a consortium headed by the Iceland boss Malcolm Walker for its 815 UK stores as "unacceptable" saying such a deal would involve a complex restructuring and undervalued the chain.
The deal from Icelandic investment group Baugur which already owns a ten per cent stake in Woolworths - is thought include plans to split the firm's retail, wholesale and publishing divisions.
Under such a deal, Woolworths could end up paying to lose its stores, while maintaining pension liabilities.
Last month Woolworths recorded a 3.2 per cent fall in sales for the first half of the year.
This morning the Woolworths share price rose 15.34 per cent to 7.67p compared to an 52-week high of 23.50p.