Tindall faces big-spending rival

A break will have given Stephen Tindall time to mull ownership options. File Picture / Paul Estcourt

Stephen Tindall is due to return to New Zealand as soon as today to resume the fight for the Warehouse Group.

Tindall raised eyebrows when he left New Zealand for a prearranged holiday on September 29, just two days after Woolworths revealed it had bought 10 per cent of The Warehouse.

Woolies wiped Tindall's $1.8 billion bid with Pacific Equity Partners for The Warehouse off the map by paying $6.50 per share, well above the $5.75 Tindall was planning to offer.

During Tindall's three-week absence there has been little public movement on the bid, but it is believed he has been considering how the ownership standoff will play out.

A source close to the Tindall camp said he had looked at several options for The Warehouse but these depended on the actions of one of either Woolworths or Foodstuffs, which also owns 10 per cent of the company.

Advisers to Pacific Equity Partners and Foodstuffs are also believed to have discussed closer relations.

The most unpredictable player is Woolworths Australia, which has a reputation as an aggressive purchaser of shares, unlikely to stick with a 10 per cent stake.

And even if it were unable to reach 51 per cent and take control, it could halt Tindall's privatisation plans.

These require him to control at least 75 per cent of shares to implement a scheme of arrangement rather than going through a formal takeover process.

Some 51 per cent of shares are held by Stephen Tindall family interests and the Tindall Foundation, 10 per cent by Foodstuffs and 10 per cent by Woolworths.

Of the remaining 29 per cent of shares held by institutional investors and individuals, Woolworths needs just 15 per cent to stop Tindall reaching the 75 per cent threshold.

One analyst said that with Woolworths' market capitalisation at A$24 billion, the expenditure of $1 billion-$2 billion would hardly be noticed. Shares in The Warehouse closed yesterday at $6.43, down 2c.