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The Commerce Commission is taking its time over the clearance appeals by Woolworths Australia and Foodstuffs for The Warehouse amid speculation that the grocery giants would challenge any decision.
The companies have sought clearance in advance of potential bids and the Commerce Commission had said it would decide
by the end of February.
But the commission, which has been talking to suppliers, has extended competition time to late March and said it could be put back again.
"One or two changes to the completion time are common but the commission is not prepared to comment further," said a spokeswoman.
Macquarie Equities investment director Arthur Lim said the postponement was predictable.
"I can't say for sure what has happened. But the commission would be careful to be seen to take its time. The stakes are so high for both companies if a decision went against them with a risk of appeals," he said.
For Woolworths the purchase offers a one-off opportunity to obtain a chain of stores which might be impossible to construct given restrictive planning laws.
For Foodstuffs a sale of the Warehouse to Woolworths would threaten its place in the retail market.
Lim believes there is little chance of either being denied clearance because The Warehouse's stake in the grocery market through its Warehouse Extra offering was small.
There was more competition in general goods from chains such as Briscoe Group and Noel Leeming.
Applications by Woolworths and Foodstuffs have played down the potential for The Warehouse's new grocery offering to challenge their duopoly in the New Zealand market.
Tim Morris, the managing director of retail consultant Coriolis, said the commission might initially have seen the clearance as a straightforward case of two supermarket operators looking at a general goods chain. But Red Sheds, other than Warehouse Extra stores, were stocking some grocery items.
A player in the Tindall camp pointed to the recent decision by Woolworths' main competitor Coles to sell and said this would draw the attention of other international players.
Lim said New Zealand was seen as part of the Australian market - it is about the same size as the Queensland market - but thought potential buyers would focus on Australia.
Woolworths and Foodstuffs are competing for the attention of Warehouse Group founder Stephen Tindall who has said he is prepared to sell his 27 per cent stake, which if combined with the 21.7 per cent held by Tindall Foundation and other family shareholding was enough to gain control.
It is understood Tindall is still talking to both parties.
Woolworths and Foodstuffs each own 10 per cent of The Warehouse. Warehouse shares closed up 1c at $7.00 yesterday.