Bid on hold as Tindall on holiday

Stephen Tindall flew out of New Zealand for a three-week holiday yesterday, leaving uncertainty around his takeover bid for The Warehouse.

Tindall is currently reassessing his bid for The Warehouse following Woolworths' raid on the share register. Sources close to The Warehouse founder say no movement on the bid is likely while he is out of the country.

It is understood Tindall's break in the UK to spend time with family had been organised some time ago.

He had hoped to present his takeover proposal to The Warehouse board yesterday before leaving on holiday, but cancelled the meeting after the Woolworths raid.

Earlier this week Australian supermarket giant Woolworths took a 10 per cent stake in The Warehouse, potentially stymying Tindall and Pacific Equity Partners' plan to take over the company and privatise it.

By coincidence, Woolworths' outgoing chief executive Roger Corbett and his replacement Michael Luscombe are also in the UK, attending a JP Morgan investment conference in Edinburgh, according to reports.

Shares in The Warehouse rose 5 cents to $6.50 yesterday - the same price as Woolworths paid for its 10 per cent stake in the company.

Ian Waddell of brokerage Waddell Johnston McCarthy said arbitrage funds had been buying the stocks.

"They're overseas specialists that get involved in takeover situations in the hope that there will be higher bids," he said.

Some 700,000 Warehouse shares were sold on market, but a parcel of 2.7 million shares worth $17 million shares was sold off-market as well.

ABN AMRO analyst James Casey said Woolworths - which already owns supermarkets here - wanted The Warehouse's retail sites, so it could expand into general merchandise in New Zealand.

"While a full takeover cannot be ruled out, the current shareholder structure may prove challenging in the near term for Woolworths to achieve its ambition," he said in a research note.