Reds Shed takeover back on the radar

Ted van Arkel. Photo / Martin Sykes

The appointment of Ted van Arkel to the board of The Warehouse Group could again open the way for Australian supermarket giant Woolworths to make a takeover bid for the Red Sheds.

Van Arkel declined to comment on that question when it was posed to him yesterday.

Both Woolworths and Foodstuffs New Zealand each hold just below 10 per cent of The Warehouse but a High Court decision that cleared the way for Foodstuffs and Woolworths to acquire The Warehouse was overturned by the Court of Appeal in 2008.

To get control of The Warehouse, a takeover bid would require founder Sir Stephen Tindall to sell his interests which make up 52 per cent of the company.

The Warehouse cancelled the roll-out of the "Extra" concept stores which sold fresh produce, frozen foods and meat which was thought to have removed a major barrier for any potential deal with a grocery chain.

There had been concerns that a takeover would further reduce grocery sector competition in the highly-concentrated New Zealand market.

Van Arkel has a formidable reputation both as a former managing director of Progressive Enterprises, owned by Woolworths, and as an independent director of several boards, including being chairman of Restaurant Brands and Charlie's Group.

He said he had known Sir Stephen and chairman Graham Evans for a long time.

Van Arkel had worked with Sir Stephen, through George Court, and Evans through Woolworths.

Van Arkel becomes a director of The Warehouse on July 1 but said he had been talking to company officials for three months about the appointment.

Craigs Investment Partners broker Chris Timms said van Arkel's appointment could pave the way for Woolworths to negotiate a takeover bid for The Warehouse.

"The board will be looking for someone who is reasonably forward thinking. The Warehouse is quite a mature company and will need some fresh thinking.

"Mr van Arkel's approach with Charlie's has been successful and he has made good progress with Restaurant Brands.

"Maybe we are reading too much into this, but the links are hard to ignore," he said.

- Otago Daily Times