Foodland completes Woolworths deal

By SIMON HENDERY

Australian retail giant Foodland Associated has settled its $690 million acquisition of the Woolworths supermarket chain, shrugging off concerns that rival operator Foodstuffs could scuttle the deal.

Foodstuffs last week mounted a legal challenge to prevent the merger of Woolworths with Foodlands' other New Zealand supermarket business, Progressive Enterprises.

Foodland said settlement of the deal took place on Sunday following further discussions with Woolworths' former owner Dairy Farm International of Hong Kong and last Friday's lifting of an interim injunction obtained by Foodstuffs.

Foodstuffs said on Friday that it would seek a High Court judicial review of the Overseas Investment Commission's approval of the deal.

A hearing has been scheduled for next week.

But Foodland group managing director Trevor Coates said the company's legal advice was that it would be able to successfully fend off any attempts to scupper the deal.

He said Foodstuffs was using "mischievous and ill-conceived tactics" to unsettle some institutional investors who had been approached to subscribe to an equity-raising exercise to fund the deal.

After putting a freeze on the book-building over the weekend, Foodland said it had asked underwriters JBWere to resume that process.

In the meantime, the acquisition has been paid for by Foodlands' working capital and by Dairy Farm.

Foodland shares, which have been suspended for the past five trading days, are expected to start trading again on the Australian Stock Exchange today.