KEY POINTS:
A major player in the international grocery business has expressed interest in buying into The Warehouse, a source close to Stephen Tindall says.
As the Warehouse chain's founder considers his options, a new player - thought to be UK grocery giant Tesco - has thrown its hat in the ring.
However, the interested party is not yet involved in formal discussions, the source says.
Tiny by international standards, the New Zealand retailer would normally be of minimal interest to global players like Tesco and Wal-Mart.
But The Warehouse does offer a one-off opportunity to buy a large chunk of premium retail real estate that could be used as a launching pad into the bigger Australian market, the source says.
Other sources play down the prospects of the third player and suggest Tindall may retain his stake and look at other options.
Tindall owns 27 per cent of the company and The Tindall Foundation - the charity he started - owns 21.7 per cent.
His thinking has been second-guessed since he officially withdrew his proposal with Pacific Equity Partners to privatise The Warehouse on October 30.
Tindall said then that Woolworths Australia's September 27 purchase of a 10 per cent stake at $6.50 per share changed the dynamics. Australian media have speculated that a sale to Woolworths Australia is inevitable given its resources and the one-off opportunity of picking up 85 Red Sheds that could be converted to its Big W Chain.
But business interests close to Tindall said Australian commentators were "Woolworths-centric" and did not take account of Tindall's own approach to business.
A source says not to underestimate the potential role of the other big investor, Foodstuffs, which bought 10 per cent of The Warehouse in July.
There is a popular view that as a federation of three co-operatives, Foodstuffs lacks financial muscle and flexibility to compete with a Woolworths bid.
But what Tindall's deal with PEP showed was that the involvement of an equity partner could add more weight.
Both sources say options are still not closed for Tindall to buy or sell.
"Stephen has said that he owns The Warehouse because of the benefit that brings for New Zealand consumers. It's up to Woolworths now [to prove] they could meet those requirements," the insider says.
The other source says that while The Warehouse had provided Tindall with much of his wealth, he was not wedded to the chain.
"What happens if Woolworths offers $8, $9 or $10 - there comes a point where you have to consider selling."
In any case, speculation about potential buyers has boosted the share price.
Some analysts have been sceptical about the Tindall privatisation proposal from the start, arguing that he had already seen a big increase in the value of his investment.
Shares in The Warehouse closed up 1c at $6.91 yesterday.
