The Warehouse set to cut loose "Extra" impediment

The Warehouse Group [WHS.NZ] will make a decision mid October as to whether to ditch their "Extra" format stores, the major stumbling block for a possible sale to either Woolworths Australia [WOW.ASX] or Foodstuffs. It is looking likely that Warehouse management will cut the 3 trial stores lose.

It must also be close for a decision in the Supreme Court to grant Lawyers for Woolworths a right to appeal the Court of Appeal's ruling to deny any sale of the retail giant on the grounds that the Warehouse could be "possible competition", in the supermarket sector.

I am of the opinion though, that given the removal of the impediment of the Extra format stores, the format that the Commerce Commission said would provide supermarket competition and their main opposition to the sale, that any hearing in the Supreme Court would be swift and a decision could be made quite quickly.

That is contrary to my previous view that the Supreme Court process would be drawn out and tedious but hey the rules have now changed and therefore my original scenario I can now throw in the trash.

I wouldn't be surprised if Woolworth's lawyers made a submission to the Commerce Commission based on The Warehouse sans the Extra format.

It is worth a try, has been done before, and would certainly get the bidding process going before Christmas.

On the bidding process.

Clearly given the current credit crunch, and financial market turmoil, the bids for The Warehouse are going to be lower than they would have been since US financial system almost fell over the edge-it still hangs on a slippery precipice-so shareholders may have to carefully consider any substantially lower bids least they get shafted.

Looking forward, and of course preempting any court decision, as shareholders we should look to the longer term and reject any opportunistic bid because of any weakness in the global economy or how much we might need the money.

I am picking a green light for Woolworths or Foodstuffs to buy the big red sheds.


Disclosure: I own WHS shares

The Warehouse @ Share Investor

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

Related Links

Warehouse results




Audited Results for the financial year ended 27 July 2008.pdf (1MB)
Warehouse Corporate profile
2008 Interim Report
Shareinvestorforum.com -Discuss this company


Related Amazon reading



The Wal-Mart Revolution: How Big Box Stores Benefit Consumers, Workers, and the Economy by Richard Vedder
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c Share Investor 2008

Emergency Economic Stabilization Act of 2008

The US$700 Billion (now US$800 Billion when you factor in all the pork barreling) bailout was passed overnight in Washington by the Senate and now just needs the Presidents seal of approval:

 THE PRESIDENT: A short time ago, the House of Representatives passed a bill that is essential to helping America's economy weather the financial crisis. The Senate passed the same legislation on Wednesday night. And when Congress sends me the final bill, I'm going to sign it into law.

There were moments this week when some thought the federal government could not rise to the challenge. But thanks to the hard work of members of both parties in both Houses -- and a spirit of cooperation between Capitol Hill and my administration -- we completed this bill in a timely manner. I'm especially grateful for the contributions of Speaker Nancy Pelosi, Minority Leader John Boehner, Majority Leader Steny Hoyer, Minority Whip Roy Blunt, Chairman Barney Frank, Ranking Member Spencer Bachus.

      Continued

  Video (Windows)

White House News

What isn't known is whether it will be successful-I have my doubts-or have any impact at all.

There is another possible crises looming, something Warren Buffett has called financial weapons of mass destruction, that is, default swaps, a type of derivative contract. These are worth around US$62 Trillion dollars.

This clearly puts $800 billion in the shade and are teetering on the edge of collapse themselves.

Hold onto your hats, it ain't over yet.

c Political Animal 2008

Magnum Farce

Dick of the week is Detective Senior Sergeant Dave Pizzini, a member of the South Auckland Police who has charged an individual for defending himself in another liquor store hold-up:

Pizzini said the arrest serves a reminder to all that taking the law into their own hands in some circumstances can not be justified.

"Shop keepers and the general public can be reassured that the police will respond with urgency to situations where assistance is needed.

"Ring 111, observe what is happening and let police deal with these situations," Mr Pizzini added.

From Stuff.co.nz

It continues the same vein of politically correct policing that we have seen in a number of similar cases over the last few years that has led to the death of members of the public and police, arrests for victims defending themselves and a consequent increase in this type of crime.

A copycat attack this evening where a lotto shop owner is now in a serious condition is no surprise given the nonsense from moronic cops like Pizzini, and there will be more.

Political pressure on police hierarchy from the Police Minister and Helen Clark to go easy on what is Labour's voter base-the majority of these crimes have occurred in Labour's South Auckland-doesn't seem far from reality. 

New Zealand's PC police constables need to be directed by the Commissioner to police instead of being involved in PC nonsense like this.

We are in danger if we cant defend ourselves, and we are increasingly having to because police often don't come in time when called, if they bother to come at all.

It is political and can be blamed on a Labour Government who want to go easy on criminals and make it tough for the ordinary kiwi-as they do in every other government department they use to lord over the populace.

Related Political Animal reading

Go ahead, make my day

c Political Animal 2008

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If you would like separate short clips of the same Vice Presidential debate please go here.

The two Presidential debates will also be seen here at Political Animal when screened latter in October.

c Political Animal 2008