takeover by foodstuffs, page-2

AT LAST!!! I have been waiting for this for ages.

Foodstuffs applies to buy The Warehouse, no bid yet (Update)
Source: WELLINGTON, Dec 21 NZPA
Published: December 21 2006, 4:57PM

Supermarket operator Foodstuffs has applied for Commerce Commission approval to buy discount retailer The Warehouse, but says it has not decided whether to launch an offer.

The three Foodstuffs cooperatives, which bought a 10 percent stake in July, said today they have applied for regulatory approval to buy 100 percent of The Warehouse shares.

Foodstuffs and fellow 10-percent shareholder Woolworths are in a position to block any formal takeover attempt. advertisement

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In October, Warehouse founder Stephen Tindall retreated from a planned $NZ5.75-a-share offer in a consortium with Pacific Equity Partners for the company after Woolworths took its stake. On news of the planned bid The Warehouse shares jumped above the offer price, where they have remained.

Foodstuffs managing director Tony Carter said the application kept the company's options open.

"No decisions have been made but we continue to consider our options, and it is only logical to obtain a view from the Commerce Commission on the potential for up to 100 percent ownership," Mr Carter said.

Foodstuffs is New Zealand's largest grocery retailer and owns the New World, Pak'N'Save and Four Square brands.

The Warehouse operates The Warehouse, which sells general merchandise and groceries, and Warehouse Stationery.

Mr Tindall's family interests and the Tindall Foundation hold around 51 percent of The Warehouse.

"We continue to hold the view that The Warehouse is a well-run business in the retail sector and has a similar culture to Foodstuffs, with both companies New Zealand-owned and controlled," Mr Carter said.

Shares in The Warehouse rose 2c to $6.92. Today's announcement was released after the market closed.

Analysts have said The Warehouse could be bought out for between $7 and $9 a share, if the cost savings a buyer could reap were counted in the price.

Speculation since Mr Tindall announced his plans has included the launch of a separate bid and the sale of his stake.