Warehouse Court of Appeal decision in Commerce Commission's favour

8.58am The Court of Appeal has overturned the High Court's ruling allowing rival grocery firms to bid for The Warehouse[WHS] by Foodstuffs and Woolworths Australia.

The Commerce Commission case argued that if either Woolworths or Foodstuffs bought The Warehouse, it would result in a "substantial lessening of competition".

This was after the Commerce Commissions case was defeated in the High Court in 2007 and an appeal against that decision was lodged earlier this year.

Trading in The Warehouse shares was thin yesterday, July 30 (NZ time), and price movement was mildly upwards during intra day trading but finished flat, so no pre announcement indications could be gleaned from the markets.

The sale process began almost 2 years ago but has been stymied by the Commerce Commission due to their contention that a purchase of The Warehouse by either Foodstuffs or Woolworths would impact to the detriment of food consumers. The Warehouse, Foodstuffs and Woolworths all argue that The Warehouse food offerings are not significant or successful enough to warrant a Commerce Commission appeal

It is likely that Foodstuffs, Woolworths and The Warehouse will appeal the Court of Appeal's decision to the Supreme Court in Wellington.


The Warehouse @ Share Investor

Why did you buy that stock?[The Warehouse]
The Warehouse set for turbulent 2008
WHS Court of Appeal case could be dismissed next week
Commerce Commission impacts on the Warehouse bottom line
The Warehouse in play
Outcomes of Commerce Commission decision
The fight for control begins soon

Disc I own WHS shares

c Share Investor 2008 & Cartoon Emmerson 2008

The Warehouse Group takeover saga continues

One to watch this week.

The Warehouse[WHS.NZX] takeover saga continues Tuesday 28 April (NZ Time) with the Court of Appeal case, and runs for a further 3 days. There will be no immediate decision, with weeks more to wait, well, we have waited nearly 2 years so far, and the likelihood that Foodstuffs and Woolworths Australia [WOW.ASX] will be able to make a bid looks more likely than not.

The Commerce Commission(CC), who are appealing against the affirmative decision in the High Court last year, have struck it lucky to some extent, with spiraling food prices making emotive headlines all over the place but it any judge worth his pay packet will look past this temporary wave of bio fuel inspired food inflation and make a fully emotionless decision.

The CC have a wafer thin case and any new arguments for their case will probably pin themselves on the possibility that The Warehouse and its "Extra" food format will be a serious player sometime in the distant future.

The Warehouse Group @ Share Investor

Long vs Short: The Warehouse Group
Warehouse bidders ready to lay money down
The Warehouse set to cut lose "extra" impediment
The Warehouse sale could hinge on "Extra" decision
The case for The Warehouse without a buyer
Foodstuffs take their foot off the gas
Woolworths seek leave to appeal to Supreme Court
Warehouse appeal decision imminent
Warehouse decision a loser for all
Warehouse Court of appeal decision in Commerce Commission's favour
MARKETWATCH: The Warehouse
The Warehouse takeover saga continues
Why did you buy that stock? [The Warehouse]
History of Warehouse takeover players suggest a long winding road
Court of Appeal delays Warehouse bid
The Warehouse set for turbulent 2008
The Warehouse Court of Appeal case lay in "Extras" hands
WHS Court of Appeal case could be dismissed next week
Commerce Commission impacts on the Warehouse bottom line
The Warehouse in play
Outcomes of Commerce Commission decision
The fight for control begins soon

Share Investor Forum-Discuss this topic


Unlikely given that The Warehouse itself has largely lost interest in the concept itself.

While many may groan when I mention government interference halting the other long running takeover saga, the Auckland Airport bid by the Canadians, this writer wouldn't put anything past New Zealand's socialist government putting their sticky mitts into this deal, should the Court of Appeal case come down in The Warehouse favour.

Whatever the machinations maybe in our courts this week, the outcome will be closely watched and a positive outcome for The Warehouse will be a serious shot in the arm for our local stockmarket, given its rather stagnant showing over the last 6 months.

Many shareholders will reinvest the collective north of NZ$ 2 billion proceeds of a sale in other shares on the NZX.

Keep watching here for further updates on this story.


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Court of Appeal delays Warehouse bid

Contrary to a comment made earlier last week when High Court Judge Jill Mallon had said an appeal could be made by the Commerce Commission to overrule her decision in November 2007, that Foodstuffs and Woolworths Australia [WOW.ASX] could make a bid for The Warehouse Group [WHS.NZ] and it should be under the condition that the case was heard urgently, the Court of Appeal has ruled that it would hear an appeal on April 29.

The latter court date will be after a court imposed ban on bidding for the Warehouse ends on February 29.

It is difficult to see a bid be made by either Foodstuffs or Woolworths after the bid deadline but it has been an unusual tussle so far and stranger things have happened in other takeover processes.

It would be presumptuous for any of the two possible bidders to show their hand early though and clearly wouldn't look good for their defence in the Court of Appeal case because the last thing the defence needs is a pissed off learned judge because his authority has been undermined in his court.

What is clear though, is that we are unlikely to get a result either way anytime soon.

If either side doesn't get their desired result in April they are likely to have another go at a case packed Supreme Court in Wellington.


Disclosure: I own WHS shares


The Warehouse Group @ Share Investor

Long vs Short: The Warehouse Group
Warehouse bidders ready to lay money down
The Warehouse set to cut lose "extra" impediment
The Warehouse sale could hinge on "Extra" decision
The case for The Warehouse without a buyer
Foodstuffs take their foot off the gas
Woolworths seek leave to appeal to Supreme Court
Warehouse appeal decision imminent
Warehouse decision a loser for all
Warehouse Court of appeal decision in Commerce Commission's favour
MARKETWATCH: The Warehouse
The Warehouse takeover saga continues
Why did you buy that stock? [The Warehouse]
History of Warehouse takeover players suggest a long winding road
Court of Appeal delays Warehouse bid
The Warehouse set for turbulent 2008
The Warehouse Court of Appeal case lay in "Extras" hands
WHS Court of Appeal case could be dismissed next week
Commerce Commission impacts on the Warehouse bottom line
The Warehouse in play
Outcomes of Commerce Commission decision
The fight for control begins soon

Share Investor Forum-Discuss this topic


Related Links

The Warehouse Financial Data

• Summary
• Charts
• Dividends
• News
• Announcements
• Price History
• Related Securities

Related Amazon Reading



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c Share Investor 2008 & 2009