WOOLWORTHS, the high street sweets-to-homewares retailer, last night rejected an indicative pounds-789m takeover proposal from private equity group Apax Partners, saying it "does not provide acceptable value or certainty".

Apax made a 50p to 55p per-share proposal, subject to conditions including access to the chain's financial and trading information.

However, in a statement to the stock exchange after the market had closed, Woolies said its board, led by chief executive Trevor Bish-Jones, had given the proposal careful consideration but would not be recommending the bid.

It said: "(The board) has concluded that the range indicated does not provide acceptable value or certainty to justify entering into detailed discussions with Apax."

Analysts have said a fair valuation of the retailer, which demerged from Kingfisher in 2001, could be up to 60p per share.

Richard Ratner, of Seymour Pierce, said: "The indications I had from institutions is that having had a price of 60p mooted that was the price they wanted. However, the pressure is now on the (Woolworths') management to perform.

"We see the share price stabilising around the 42p to 43p level, as the company is effectively in play and companies do have a habit of not going back to the pre-bid levels."

Apax declined to comment on whether it would return to the 100-year-old retail chain with a higher offer.

Analysts believe further approaches from private equity players, or even supermarket chains like Tesco or Asda, cannot be ruled out as they look to expand their non-food retail space.

Private equity firms look to buy companies using mostly debt, before squeezing out maximum value and then selling for a hefty profit.

Woolworths is a more difficult target, as it has almost no freehold property that can be used to secure the debt that private equity players use to acquire their targets.

Shares in Woolworths firmed 0.25p to close at 48p.