Warehouse shares fall as Foodstuffs gains 10 per cent

By Marcus Brogden

Shares in The Warehouse fell this morning on news supermarket giant Foodstuffs Group had reached its desired 10 per cent holding in the mega-retailer.

The shares dropped 13c to 480c on opening, after trading between 513c and 344c over the year.

Foodstuffs managing director Tony Carter today maintained Foodstuffs plans to be a passive investor and had no plans to influence The Warehouse's direction, or further increase its shareholding.

"We were quite clear when we put our initial stand in the market that we would not be asking board representation," he told NZPA.

He said Foodstuffs had no intention - "at this stage" - of increasing its stake beyond the 10 per cent.

Foodstuffs mounted a lightning stand for 10 per cent of The Warehouse on June 7, gaining just over 5.6 per cent of the company by the end of trading that day.

However, its bid stalled as shares topped the $5 Foodstuffs was offering.

Since then, Foodstuffs had been acquiring the remainder of its preferred stake in small parcels at a cost ranging between $4.85 and $5, and yesterday had pushed its stake to 8.3 per cent.

It completed its order before the start of trading today.

Speculation was rife as to why Foodstuffs had made its bid.

The supermarket giant has said that the stake was a long-term investment and it was not intending a full takeover offer.

Observers noted that such a stake could block any takeover bid of The Warehouse by overseas rivals such as WalMart, Tesco or Coles Myer.

- NZPA

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