Tindall botched bid for Warehouse, say analysts

Stephen Tindall

Stephen Tindall moved too early in his bid to privatise The Warehouse, says a fund manager, with others slating the lack of detail Tindall has provided and the lack of communication from company directors to minority shareholders.

Two weeks ago Tindall, the company's founder, announced his intention to take The Warehouse private by buying out minority shareholders. The $5.75 a share he said he would offer was widely seen as a low bid.

Tindall and his backer Pacific Equity Partners were ambushed by Woolworths' raid last week, which secured 10.1 per cent of the company at $6.50 a share.

That added another significant obstacle to Tindall's plans, on top of the 10 per cent Warehouse stake Foodstuffs acquired a few weeks earlier.

One fund manager believed Tindall and Pacific Equity Partners had shown their hand too early.

"Obviously they weren't ready, which is presumably why they've ended up with such a mess now.

"What they announced to the market was two fingers to the opposition and no proper bid for people to assess, creating this opportunity for Woolworths to come in.

"I imagine there's a bit of tension going on within the Tindall camp. Did their advisers or PEP tell them that might happen?"

Furthermore, the fund manager questioned the lack of information about Tindall's plans from the company's independent directors, including chairman Keith Smith, who resigned from the Tindall Foundation two months ago after learning of the proposal.

"How many of the other independent directors, along with Keith Smith, knew that this was a possibility?" said the fund manager.

Smith has told the Business Herald that the board could make no statement to the stock exchange about Tindall's plan because it did not have a formal proposal.

Another fund manager said he and colleagues had been watching developments and the behaviour of the independent directors "with a little bit of bemusement" over the past few months.

"You had reports of due diligence being done, and rumours that the Commerce Commission had been asked to give clearance to a party or two who were looking at taking a stake.

"If that was happening, maybe Foodstuffs got wind of it and that's why they came in and took their 10 per cent stake."

The fund manager also believed The Warehouse's July 6 earnings upgrade could have been announced sooner.

"Why were they holding back an upgrade? Was it because this privatisation deal was going to go ahead?"

He said the lack of any real statement from Smith or the other independent directors to minority shareholders, "felt a little bit flaky, like nobody was at home".

"There was supposed to be a bid, and nothing's on the table and no documentation and then there wasn't going to be a bid but an amalgamation and still no documentation on the table.

"Now the guy's gone on holiday and still no comment from the independent chairman - it's kind of odd. It looks like a bit of a dog's breakfast."

Doghouse

* Some fund managers say Stephen Tindall has botched his bid to take The Warehouse private.

* At least one believes Tindall's takeover offer was a rush job.

* They have criticised the lack of detail given by Tindall and the absence of commentary to shareholders from The Warehouse's independent directors.