Tindall's break has analysts puzzling over his next move

Fund managers are scratching their heads over Warehouse founder Stephen Tindall's next move in his bid to take the business private.

Tindall was to have presented his plan to the company's board this week but cancelled that meeting after Australian rival Woolworths acquired a 10.1 per cent stake. He has now left the country for three weeks, leaving the matter in limbo until his return.

AMP Capital Investors' Guy Elliffe said Tindall's exit was "a pretty sensible strategy ... to see if the market will become a little less excited over the next week or two".

The market would be trying to second-guess Woolworths' intentions and the ability of Tindall and the Tindall Foundation, which between them own 48 per cent of the company, to participate in the votes required to approve the plan Tindall has proposed.

Tindall and Australia's Pacific Equity had hoped to take over The Warehouse through an amalgamation requiring the approval of 75 per cent of Warehouse shareholders.

After the Woolworths' raid Tindall said he still wanted to privatise the business but was reassessing his plans.

Paul Robertshawe of Tower Asset Management said the ball was definitely in Tindall's court.

"It could end up as a stalemate for years depending on his view or it could end up moving very quickly if he decides he's had enough and can't achieve what he wants because of the new shareholding structure."

That structure also includes the 10 per cent stake acquired this year by New Zealand's largest supermarket operator, Foodstuffs.

Woolworths owns Progressive Enterprises, the other member of the supermarket duopoly that Tindall wants to crash by rolling out grocery retailing operations through The Warehouse chain.

"Tindall may come back with PEP [Pacific Equity Partners] at a higher price but I'm not sure that means anything, given who those two shareholders are," said Robertshawe.

"I don't think money matters to them ... even if [Tindall offered] $7 a share, I just don't think Woolworths and Foodstuffs would accept."

Robertshawe believed Woolworths' stake was probably intended purely as a blocking manoeuvre or a base for an eventual takeover bid rather than a strategy to frustrate Tindall's plans.

He said The Warehouse management appeared to be advancing its push into grocery retailing anyway.

He put "a low value" on the idea that Tindall could speed that process by taking the company private.

If minority investors didn't have the appetite for the risk associated with Tindall's ambitious plans, they could always sell out of the company.

"If you understand the strategy you have the choice of buying or selling ... no one's forcing you to own the shares if you think the strategy's wrong."

Shares in The Warehouse slipped 7c to $6.43 yesterday - below the $6.50 a share Woolworths paid for its 10.1 per cent stake.