KEY POINTS:
Stock exchange operator NZX said The Warehouse would be in breach of listing rules if it had received a takeover offer without disclosing it.
Woolworths, Australia's largest retailer, has made a $2.2 billion offer for The Warehouse, a source said today, as it looks to expand into the
country's general merchandise sector.
Woolworths had made a written offer of $7.15 a share, subject to regulatory approval, the source said, sending shares in the country's biggest listed retailer, up as much as 6.6 per cent to $6.57.
Shares in The Warehouse have dropped sharply from a peak of $7.32 in mid-April on concerns about delays from the regulator, which has deferred a decision on bids for The Warehouse four times.
The Commerce Commission is due to make a ruling on bids for The Warehouse from Woolworths and local private co-operative Foodstuffs, by Friday.
Woolworths' written offer was made in late April but was not revealed by The Warehouse apparently because it remained subject to regulatory approval, the source said.
The Warehouse was not immediately available for comment, but a spokeswoman for NZX told Reuters if it had received a conditional takeover offer which it did not disclose, then it would be in breach of listing rules.
Woolworths and Foodstuffs both hold 10 per cent stakes in The Warehouse, but have held off from launching full bids as they await a decision from the Commerce Commission on whether a bid from either would lessen competition.
Woolworths chief executive Michael Luscombe wrote to The Warehouse board several weeks ago saying the company would be prepared to pay $7.15 a share, media reports said earlier.
Woolworths said in January that it had long targeted The Warehouse, which operates the giant Red Sheds stores, as the best way to access New Zealand's general merchandise sector.
The Australian Financial Review also reported market rumours that Foodstuffs had verbally told The Warehouse it would offer up to $7.75 a share.
The Warehouse's founder Stephen Tindall is likely to be pivotal in any bidding war, controlling around 50 per cent of the company when combined with interests close to him.
Analysts have speculated that the commission's delay in making a final decision means it will decline both applications.
If that happens, both companies are expected to appeal to the High Court.
The two chains already dominate grocery retailing in New Zealand, with Foodstuffs having about 53 per cent market share and Woolworths 47 per cent.
- REUTERS
