KEY POINTS:
In the battle to control The Warehouse there are two wildcards. The Commerce Commission and the public-spirited founder Stephen Tindall, who controls or has influence over a majority of the retailer's shares.
The common factor is this: the Commerce Commission's approval of a takeover and Tindall's acceptance of an offer will, in varying measures, be determined by the likely consequences of a takeover for New Zealand.
Neither of the suitors, the Aussie retail giant Woolworths and the Kiwi co-op Foodstuffs, can be sure the cards will not be played against them.
The conundrum was amply illustrated by Woolworths chief executive Michael Luscombe and chief financial officer Tom Pockett's whistle-stop visit this week.
Why else would not one but two of the Aussie retailer's top executives front up to hand over their application to the commission?
And how else to explain the praise they heaped publicly on Tindall and the extent to which they drew parallels between the ethos and culture of The Warehouse and their Big W general merchandise stores across the ditch?
The received wisdom has been the commission was unlikely to look askance at an approach from the major grocers because The Warehouse operated in a distinct market - general merchandise. Sure the retailer had made moves into groceries with its Warehouse Extra format.
But that move only highlighted the logic of doing a deal now. The chances of either grocery giant getting the green light were much higher while The Warehouse's ambitions for groceries remained ambitions.
That argument, however, ignores the commission's 2005 rejection of Fletcher Building's bid to buy the concrete products division of Auckland's W. Stevenson & Sons.
Stevenson represented the only opportunity for a third party to seriously challenge the near-duopoly of Fletcher Building's Golden Bay Cement and the local operation of Switzerland's Holcim.
Its mere presence helped to keep the lid on New Zealand's already high cement prices.
"Stevenson provides a unique opportunity for bridgehead entry into the cement market," the commission said.
It may yet decide The Warehouse represents a similar bridgehead into the grocery market. Sure - as Luscombe, Pockett and even Foodstuff's chief executive Tony Carter insist - food need not be a major part of the suitors' strategy.
But groceries could still work for The Warehouse. As the Business Herald today notes, even a small range may encourage shoppers to stay in The Warehouse's stores longer and make more frequent visits, boosting sales across the board.
Even a small offering would still represent the only chance of a nationwide challenge to the Woolworth's and Foodstuffs duopoly.
Prices are set by the challenger, not the incumbent.
(Such a ruling, however, would knock both suitors out of the game. The Warehouse shares would plummet and Tindall's abandoned privatisation plan could be dusted off).
The Tindall factor is less of a concern for Foodstuffs.
In the final analysis most believe Tindall will be convinced by cash. But faced with equivalent bids, he could argue a merger with Foodstuffs would create a New Zealand-owned retailer of a size to control a foreigner.
Woolworths as a foreign entity faces a harder challenge.
And it is for this reason Luscombe this week applied the soft soap.
Luscombe said: "I have found Stephen a very engaging person and our views on what is an appropriate way to run a retailing business, we are very much in concert. He has been a marvellous New Zealander."
Such rhetoric is so transparent that it may even embolden Tindall (in the event of Commerce Commission approval of the Aussie's bid) to really play hard ball.
So much the better for The Warehouse's minority shareholders.
