UK - Woolworths Group today stated requirements realted to its pension liabilities was one of the key reasons it has rejected a takeover offer by frozen foods chain Iceland Foods for its retail division.

The group said Iceland's demands was "unacceptable to the board" as it would have required the Woolworths company retain all the pension liabilities for current and former employees of the retail business.

Woolworths' pension deficit was valued at £48.2m (€53m) according to its latest annual report.

Moreover, the bid involved "complex restructuring", undervalued Woolworths' assets and "potentially would have adversely impacted the group's existing funding arrangements, after meeting any resultant obligations to the pension fund," the London-based retailer said in a statement.

Shares of Woolworths Group soared as much as 23% earlier today after the candy-to-DVD retailer rejected the takeover approach, led by Malcom Walker, founder and chief executive officer of Iceland.

A takeover would have added 815 stores to Iceland, which is owned by Rykjavik-based Baugur Group, though did not include 2Entertain, the group's video-publishing joint venture with the BBC, or its E.UK CD wholesale business.

No financial details of the offer have been made public, but newspaper reports suggest the offer was thought to have been worth less than £50m.

Baugur now holds a 10% stake in Woolworths.

Officials at Iceland were unavailable for comment at the time of publication.

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