Foodland bidder confirms initial terms

The bidder's statement for a takeover that could see the New Zealand division of supermarket owner Foodland spun off as a separate company has finally been unveiled.

On Friday, the Australian grocery and liquor wholesaler Metcash Trading released its bidder's statement, confirming the terms of last month's original proposal to acquire its Perth-based rival.

Metcash is offering to pay A$846 million ($921 million) for Foodland's Australian operations, leaving Foodland's New Zealand operations to be spun off separately.

Foodland owns Progressive Enterprises, which has the Countdown, Foodtown and Woolworths chains in New Zealand.

There has been speculation that if the takeover is successful, Progressive Enterprises will be ripe for a listing on the New Zealand exchange.

Metcash has offered 2.44 Metcash Australian preference shares or A$7.18 cash for each Foodland share, which it said was a 39 per cent premium to Foodland Australia's estimated A$610 million value.

It will offer one Metcash New Zealand preference share per Foodland share, with the New Zealand shares to later convert into ordinary shares in Foodland New Zealand.

Foodland has advised its shareholders to do nothing on the Metcash bid while it waits for the offer documents and considers all its options.

Metcash shareholders have voted overwhelmingly for a capital reorganisation to prepare the grocery and liquor wholesaler to bid for rival Foodland.

Metcash shares closed 2c lower to A$3.39 on Friday. Foodland shares lost 12c to A$23.88.

- AAP