Foodstuffs seeks 10% stake in The Warehouse
7 June 2006
Foodstuffs seeks to acquire 10% stake in The Warehouse
New Zealand's three Foodstuffs companies today announced their intention to purchase up to 10% of shares in The Warehouse Group Ltd (TWL).
The Kiwi co-operative organisation consists of Foodstuffs (Auckland) Ltd, Foodstuffs (Wellington) Co-operative Society and Foodstuffs (South Island) Ltd. The national brands under the Foodstuffs umbrella are PAK'n SAVE, New World, Four Square and Write Price.
The three companies are offering $5 per share which represents a premium of 28% over yesterday's closing price and a 31% premium over the three-month volume weighted average price (VWAP).
Foodstuffs (New Zealand) Ltd Managing Director Tony Carter says the stake is a strategic long-term investment for Foodstuffs and there is no intention to move to a full take-over offer.
"We see The Warehouse as an attractive investment opportunity. It is a well-run business in the retail sector which we know and understand, and being New Zealand-owned and controlled its culture is similar to ours."
Foodstuffs will not be seeking representation on The Warehouse's board.
Mr Carter says the purchase will be funded out of normal working capital facilities and there will be no impact on Foodstuffs' ongoing development programme.
"This level of investment is one which our respective boards are comfortable with," says Mr Carter.
The shares will be purchased on and off-market by subsidiary companies associated with each Foodstuffs company.