Woolworths Australia has confirmed that it may bid for Foodland's New Zealand business - the Foodtown, Countdown and Woolworths (New Zealand) chains.
"We'll certainly be looking at it, but it's a market with some constraints," chief executive Roger Corbett said on the Nine Network's Business Sunday programme in Australia. "The
New Zealand market is very competitive."
Foodland is the second-biggest supermarket operator in this country after Foodstuffs.
An independent report from Grant Samuel - commissioned in response to a hostile takeover bid by Australian company Metcash for Foodland's Australian and New Zealand businesses - said the New Zealand arm had an equity value of between A$1.9 billion ($2.05 billion) and A$2.1 billion. Foodland last week rejected the Metcash bid.
Metcash wants to hang on to the Australian business and spin off the New Zealand one. However, Foodland has said that it, too, would look at a demerger of the Australian and New Zealand operations.
Foodland chief executive Trevor Coates says a demerger - one of a range of options being considered - would probably take four to six months and would need shareholder approval. Corbett said Foodland had made "substantial progress in New Zealand".
Despite the confusion of the New Zealand chain operating under the Woolworths name, Woolworths Australia does not have a supermarket business in New Zealand. That means it could buy the assets without being blocked by competition watchdogs.
Corbett would not say if a decision on bidding for the New Zealand business was imminent.
The Grant Samuel report - commissioned by Foodland and released on March 1 - said Coles Myer, Australia's second-biggest retailer, was another likely bidder. Metcash, a grocery wholesaler, launched its bid for Foodland in December.
It wants to build a stronger rival to Australia's Woolworths and Coles Myer.
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