The Commerce Commission has delayed its decision into whether or not Woolworths Australia and Foodstuffs are allowed to buy The Warehouse.
The commission said this morning that it would put its decision back by a further two weeks to Friday June 8, making this the fourth dealy in
the decision.
Woolworths Australia and Foodstuffs both have 10 per cent of the Red Sheds and have applied for approval to make an offer for 100 per cent. Neither company has yet made a bid or declared its intentions.
With three previous delays, the grocery sector and sharebrokers had been preparing for the prospect of another extension in commission deliberations that will mean continuing distractions for management at the Red Sheds.
If both applications are approved, it will likely spark a bidding war, with Woolworths and Foodstuffs competing for the 51 per cent held by the Tindall family and the Tindall Foundation.
Shares in the Warehouse dropped from $6.56 to $6.40 before closing yesterday at $6.55.
Today's delay may put further pressure on the share price, with some analysts suggesting that each delay reduces the likelihood Woolworths Australia and Foodstuffs will win approval.
The Warehouse has two Warehouse Extra grocery stores and is planning to set up 15 more, which would compete with Foodstuffs and Woolworths.
The commission is considering whether allowing Woolworths or Foodstuffs to buy it would reduce competition in the grocery market.
