KEY POINTS:
Australian private equity firm Pacific Equity Partners is preparing another bid for The Warehouse if the Commerce Commission blocks Woolworths and Foodstuffs from buying the Kiwi retailer, sources say.
The commission will today rule on whether Woolworths and rival supermarket group Foodstuffs can buy up to 100 per
cent of The Warehouse.
The Business Herald understands Pacific Equity Partners has been working to revive its previous plan to privatise The Warehouse should both supermarket groups be blocked.
Foodstuffs is also involved in the plan and would take part in the privatisation even if the commission refused it clearance to take over The Warehouse, one source said. Under such a scenario, Foodstuffs would likely be able to buy up to 20 per cent of The Warehouse without breaching the commission ruling.
Warehouse founder Stephen Tindall - who with Pacific Equity Partners was part of the plan to privatise The Warehouse last year - is expected to rejoin the consortium.
Under last year's privatisation play, Tindall was to take a 55 per cent stake of The Warehouse, with Pacific Equity Partners taking the remaining 45 per cent. But any stake taken by Tindall in the current proposal is expected to be significantly smaller.
After delaying its decision four times, the commission will release it at 9am today, it is understood.
The delays have led to speculation that the commission will turn down the Woolworths and Foodstuffs applications and has been ensuring its decision is sufficiently robust to withstand a potential court appeal.
It is understood Pacific Equity Partners' proposal is not finalised and an actual bid will be some weeks away.
The Australian private equity firm will be well cashed up for another tilt at The Warehouse as it is expected to close off its latest fund of $4 billion this month.
If Foodstuffs is given clearance to acquire The Warehouse, Pacific Equity Partners is expected to be also involved in any bid made by the New Zealand co-operative.
Warehouse shares rose 39c to $6.55 yesterday after a report in the Business Herald that Woolworths had written to The Warehouse board saying it would pay $7.15 a share to gain control of the company if the Commerce Commission cleared the acquisition.
Warehouse Group chairman Keith Smith described the report as "a storm in a teacup", but said there had been "some discussions with Foodstuffs and Woolworths over the past months in an attempt to clarify their intentions".
"I've had approaches from a number of people at different times but we have never received an offer."
Smith said the board was complying with market disclosure rules.
"If we receive an offer we have an obligation to notify it, as do they. If they [Woolworths] have made an offer they have to disclose it to the market as well."
Smith declined to comment on reports that Woolworths chief executive Michael Luscombe had written to the board with a $7.15 a share proposal.
In Australia, Pacific Equity Partners is making a bid for retail giant Coles in conjunction with retailer Wesfarmers and private equity firm Permira.
Some of the Coles assets - such as Kmart and Officeworks - would be a good fit with The Warehouse, should Pacific Equity Partners win both companies.
This could result in the two companies merging or Wesfarmers and Permira eventually taking a stake in The Warehouse.
Pacific Equity Partners and Tindall - whose interests control more than 51 per cent of the company - last year said they planned to offer $5.75 a share for The Warehouse in an attempt to privatise the firm.
But that offer was blown out of the water by Woolworths, which paid $6.50 a share for its 10 per cent stake in the company.
