The Warehouse takeover offer: Adamantem pitches $1.50-$1.70/share

The Warehouse has received a takeover offer. Photo / NZME

The Warehouse Group says it has received a takeover offer, pitched at $1.50 to $1.70 a share, from Australian private equity firm Adamantem Capital Management through a scheme of arrangement.

The offer values The Warehouse Group in total at $520.2 million to $589.6m.

The proposal noted that founder Sir Stephen Tindall, the Tindall Foundation, and trustees of certain trusts associated with Tindall, supported it, and would remain invested in the company through reinvesting a portion of their consideration in the acquirer.

Tindall, and interests associated with him, own just under 50% of the company.

Founder shareholders would hold up to 50% of the acquirer. All other shareholders would receive an all-cash offer for the entirety of their shareholding.

If the proposal is to proceed, shareholders would be required to vote to approve it.

A resolution to approve must be passed by a majority of 75% of the votes of the shareholders in each interest class eligible.

“Given the founder shareholders are to receive the right to re-invest and this is not being provided to other shareholders, the founder shareholders may not be in the same interest group as other shareholders,” The Warehouse said.

There was no indication from Adamantem that any other shareholder has committed to the proposal.

“The proposal is incomplete and conditional and, as a result, there can be no certainty that any transaction will eventuate,” The Warehouse said.

The board has appointed a sub-committee, comprising of Dame Joan Withers (independent chairwoman), Tony Carter and Dean Hamilton (both independent directors) to respond to the proposal.

The company has also appointed Jarden New Zealand to advise it.

Shares in The Warehouse last traded at $1.43, having dropped by 21% over the last 12 months.

On Monday, The Warehouse told shareholders and other stakeholders it had received the approach from Tindall and Adamantem.

It told shareholders not to sell their shares.

The offer came after speculation in the Australian’s Dataroom column that Adamentem and Tindall were working on a possible buyout of The Warehouse.

The Australian reported that it understood Tindall wanted to move The Warehouse towards becoming a third player in the supermarket industry.

Adamantem is an Australian investment manager which was founded in 2016.

It has investments in a range of businesses in New Zealand and Australia including the sausage and bacon business Hellers.

Tindall owned 27.01% of The Warehouse directly while the Tindall Foundation had 21.31% as of July 30 last year, The Warehouse’s annual report shows.

Tindall started The Warehouse in 1982.

The Warehouse Group has been in cost-cutting mode amid a difficult time for retailers.

Last month it revealed plans to thin out its management structure as it refocuses on its three core brands - The Warehouse, Warehouse Stationery, and Noel Leeming.

Jamie Gray is an Auckland-based journalist, covering the financial markets and the primary sector. He joined the Herald in 2011.