Friday, February 18, 2005
A contractual change-of-control clause in a key contract has thrown a roadblock in front of the attempted acquisition of Britain's Woolworth's by a private equity fund. The Apax group had previously made a £789 million offer for "Woolies," as the chain is popularly known, but the board rejected it.
Now Apax has learned that a lucrative major contract by one of the chain's divisions, Entertainment UK, contains change of control clauses that could terminate kick in if Apax takes over the company. The contract is to supply supermarket chain Tesco with CDs, DVDs, and video games. Apax is apparently mulling over its options for another try.