KEY POINTS:
Australian retailer Woolworths said today it had lodged an application to bid for the country's largest listed retailer, The Warehouse Group.
Woolworths said in a statement it had posted an application with the Commerce Commission to buy 100 per cent of Warehouse.
Woolworths bought a 10 per cent
stake in the company in September.
Woolworths chief executive Michael Luscombe said the company was seeking clearance, but as yet had made no decision on whether it would make a proposal to buy the group.
Mr Luscombe said he did not believe there would be any competition issues that would prevent Woolworths from acquiring Warehouse.
"This application allows us to continue to evaluate all options in relation to our potential entry into the general merchandise sector in New Zealand," he said.
"As part of the review required by the Commerce Commission we will provide any assistance as required."
Woolworths rival, Foodstuffs, also has 10 per cent of The Warehouse.
There is speculation it is considering joining a consortium that includes company founder Stephen Tindall, who controls over 50 per cent of the company, and Private Equity Partners (PEP).
The owner of New World, Pak 'n' Save and Four Square supermarkets applied to the Commerce Commission just before Christmas to buy all of The Warehouse. Like Woolworths' application, it does not mean there will be a formal bid.
Mr Tindall said last year he was going to launch a bid for the company with PEP, but that was before Woolworths made its raid for 10 per cent and the indicated price was well below the current price.
Mr Tindall, family interests, and the Tindall Foundation together own 51 per cent of the company. He is understood to be poised to make his move.
Shares in Woolworths were ahead eight cents at A$22.93 ($26.11) in afternoon trading in Australia.
Analysts said a New Zealand retailing giant could be created if Mr Tindall and Foodstuffs joined in a consortium with PEP. It would have huge buying power and could make savings in logistics.
It would also allow Mr Tindall to stay involved with the retailer he created and move further into food in partnership with the country's most successful supermarket operator rather than in competition with it.
Foodstuffs would not have to raise money for a bid and PEP gets an investment in successful retailers.
Any bid by the consortium would start with a 60 per cent holding and have to be higher than the $6.50 Woolworths paid for shares.
The alternative scenario is that Woolworths bids so high that Mr Tindall and the foundation sells to them.
Analysts have said that Woolworths was the more likely winner in any bidding war because it has deeper pockets than Foodstuffs and could generate greater cost savings.
The situation is seen as complex with Mr Tindall having to weigh options for taking cash out of the business, minority shareholder issues and assess the likelihood of bids from the blocking shareholders.
Some analysts were surprised that Foodstuffs applied to the Commerce Commission because it operates in a different market to The Warehouse so there shouldn't have been competition concerns.
Warehouse shares were up shortly after the announcement by 21 cents to $7.20, valuing the company at $2.23 billion.
- NZPA
The Warehouse - What has happened so far
* December 2006
Supermarket co-operative Foodstuffs, owner of New World, Pak'n' Save and Four Square supermarkets, applies to the Commerce Commission to buy The Warehouse.
* November 2006
Rumours circulate that a major player in the international grocery business - possibly Tesco - has expressing interest in buying into The Warehouse.
Groceries are added to the available products at new Warehouse Extra stores in Sylvia Park and Whangarei.
* October 2006
Tindall officially withdraws his proposal to privatise The Warehouse with the backing of Pacific Equity Partners.
* September 2006
Stephen Tindall reveals a plan to privatise The Warehouse. It is built on a cash offer of $5.75 a share with Pacific Equity Partners.
Woolworths buys 10.1 per cent of The Warehouse, mostly through an overnight raid, with a cash offer of $6.50 a share.
Tindall goes on holiday, saying he is considering his next move.
* July 2006
Foodstuffs takes a 10.1 per cent share of The Warehouse, mostly through a $5-a-share offer.
The Warehouse
* New Zealand's largest listed retailer.
* Founded in 1982 by Stephen Tindall.
* 85 Warehouse NZ stores and 43 Warehouse Stationery stores.
* More than 9000 employees from Kaitaia to Invercargill.
* $1.7 billion sales in New Zealand in the 2006 financial year.
* Market capitalisation of $2.1 billion.
* Owned 27 per cent by Stephen Tindall, 21.7 per cent by the Tindall Foundation, 10 per cent by Woolworths and 10 per cent by Foodstuffs.
Woolworths
* ASX-listed company with a market capitalisation of A$27.5 billion.
* The second biggest employer in Australia with 140,000 staff spread across 1600 stores under 14 brands
* Bought Progressive Enterprises from Foodland in 2005 for $2.775 billion.
* Progressive Enterprises runs Woolworths, Foodtown and Countdown outlets and holds approximately 43 per cent of the New Zealand supermarket sector.
* Progressive Enterprises has 150 supermarkets and employs 18,000 people.
* Owns 10 per cent of The Warehouse.
Foodstuffs
* $6.8 billion turnover in 2006 financial year.
* Holds about 57 per cent of the New Zealand grocery market.
* 625 stores including New World supermarkets, Pak'N Save and Four Square convenience stores.
* Owns 10 per cent of The Warehouse.