KEY POINTS:
Shares in The Warehouse are likely to jump after the competition regulator clears the way for two potential takeover bids, brokers First NZ Capital said today.
First NZ analyst Sandra Urlich said both of Warehouse's suitors, Australia's biggest retailer Woolworths and grocery co-operative Foodstuffs, were expected to get clearance from The Commerce Commission to launch bids.
"Assuming the Commerce Commission clears the respective parties we would expect some further price strength from here," Ms Urlich said in a research note.
The regulator is due to make a decision by April 27.
She said the market view is that 50 per cent owner Stephen Tindall will accept an offer for his stake from Woolworths, leading to a full takeover bid.
Shares in The Warehouse last traded down one cent at $7.05, having traded between $3.60 and $7.31 over the past year.
The Australian Financial Review reported Woolworths' chief executive saying the company had sufficient funds for a number of acquisitions.
Woolworths and Foodstuffs both have a 10 per cent stake in the company, though neither has committed to launching a full takeover offer should they obtain regulator clearance.
If the regulator denies both parties permission to acquire The Warehouse, a meaningful share price retraction is likely, Urlich said.
- REUTERS
