Sharebroker Goldman Sachs JBWere says Woolworths' bid for The Warehouse will likely be made through a scheme of arrangement - with the backing of the Warehouse board of directors - rather than an on-market takeover.
Australian private equity company Pacific Equity Partners, which is believed to be backingthe Foodstuffs bid for The Warehouse, is also interested in a scheme rather than an on-market takeover.
Both Woolworths and Foodstuffs own 10 per cent of the Warehouse which is enough to prevent a compulsory sale under takeover rules.
The view is put forward in a report by Goldman Sachs JBWere analyst Rodney Deacon.
It was one of several broker reports issued yesterday in the wake of the news that the sales process will be heading back to court. Thursday's decision by the High Court - giving the Commerce Commission leave to appeal - takes the case to a new legal phase.
But the market - which is impatient for the commission bid to fail to hasten a takeover bid and a substantial premium for their shares - has applauded a "condition" from the judge, Jill Mallon, that the appeal must be dealt with "urgently".
On the expectation that the case could be heard early - possibly this month - shares rose 10c on Thursday and another 19c yesterday to close at $5.84.
Yesterday senior legal sources were surprised by the approach of Judge Mallon in setting the "condition" of urgency for a hearing and one questioned its standing in law.
Buddle Findlay competition lawyer Tony Dellow said it was the first competition law case he knew of with such a stipulation and he was surprised at the ability to have the appeal heard so quickly.
The commission, which has to brief a new lawyer to present its case, had sought a stay on the sale till April.
Another legal source questioned prospects for the stay ending at February 29.
It might take into account the need for urgency but would not be bound by it, the source said.
Woolworths counsel to the hearing seeking leave to appeal have insisted that the High Court decide the case on the basis of facts.
But sources familiar with the Commerce Commission case have said the regulatory body was likely to claim Justice Mallon made leaps of judgment about facts and showed insufficient scepticism about submissions by Foodstuffs and Woolworths.
