Foodland reported to have received bids for NZ business

Perth-based Foodland Associated is understood to have received offers for its New Zealand business valued at up to $2.1 billion, according to Australian media reports.

A takeover bid for Foodland by Metcash Trading is expected to be decided within days. Metcash does not want the New Zealand operations, Progressive Enterprises, which comprise two thirds of Foodlands' earnings.

Metcash has offered A$1.05 billion ($1.13 billion) for Foodland's Australian supermarket business and plans to leave the New Zealand operations as a listed company owned by Foodland shareholders.

The Australian newspaper said today it understood the Foodland board had received separate offers for Progressive Enterprises, and may be attempting to marry Metcash with one of those parties to stitch together a joint full takeover bid.

The paper said Woolworths Australia, Pacific Private Equity, Newbridge and Bain had all made offers for the New Zealand business.

Coles Myer is also seen as a contender if Woolworths makes a formal bid.

No-frills German grocery giant Aldi has confirmed it is eyeing the New Zealand market and may also be a possible interested party.

However, if it did not win, Aldi's possible presence in New Zealand could depress the price for Progressive as it would break the current duopoly between Foodstuffs, which owns the New World and Pak'n Save chains, and Progressive Enterprises, which owns the Countdown, Woolworths and Foodtown chains.

Retail experts predict a third supermarket operator would lead to lower prices, as well as driving diversity in the types of stores on offer.

Aldi, which has more than 5000 stores worldwide, has filed almost 130 applications to trademark its brands in New Zealand since February.

Progressive yesterday turned in a strong performance underpinning an 8.5 per cent jump in the third-quarter sales of Foodland.

Progressive's third-quarter sales rose 4.5 per cent to $982.2 million bringing nine-month sales to $2.96 billion, a 4.3 per cent increase on the same period the year earlier.

In Australian dollar terms, the New Zealand supermarket sales were even better -- up 10.5 per cent for the quarter and 10.1 per cent for the year.

That helped drive Foodland's total third-quarter sales up 8.5 per cent to A$1.59 billion ($1.71 billion).

Sales from Foodland's New Zealand franchise and supply division were also strong, rising 13.8 per cent to $75.1 million for the quarter.

That took total third-quarter sales from New Zealand operations to $1.06 billion, up 5.1 per cent.

The refurbishment of Woolworths New Plymouth was completed and the replacement Woolworths store in the Queensgate Shopping Centre in Wellington began trading on the first day of the fourth quarter.

The refurbishment of Woolworths Paraparaumu was ongoing and refurbishments of three other stores -- Countdown Glenfield, Woolworths Dinsdale and Mairangi Bay -- had started.

Three unprofitable Woolworths at Gull outlets, Wiri, Pakuranga and Botany, had been closed.

- NZPA