When will The Warehouse bidders make their move?

The length of time that has passed between The Warehouse Group [WHS.NZ] deciding to drop their "Extra" format stores-the impediment that the Commerce Commission most recently successfully argued in the Court of Appeal was the reason the company couldn't be sold to its two current suitors-doesn't look encouraging for any positive outcome anytime soon.

Just when are they going to make a move?

In January, The Australian reported that both The Warehouse' suitors were "still considering" a purchase of the company .

There are a few reasons why Foodstuffs and Woolworths Australia [WOW.ASX] The Warehouse' two suitors, might be delaying or reconsidering a move.

1. the current uncertain economic climate might make a bid less attractive. I would argue that any bidder might be able to turn this to their advantage though by being able to bid lower.

2. capital maybe harder to obtain in order to make a bid.

3. both suitors could be waiting for a decision in the Supreme Court where Woolworths has sought leave to apply to have the Appeal Court decision quashed

4. Waiting for a response from the Commerce Commission to The Warehouse decision to dump their "extra" format stores.

5. A new proposal from founder and majority shareholder Stephen Tindall to take the business private.

The biggest impediment to a quicker sale process is The Commerce Commission's Paula Rebstock and her failure to make a ruling post the Warehouse ditching their Extra format stores in October 2008.

The Extra format stores were the main impediment, from the Commission's point of view, for denying the sale of The Warehouse and now that they have gone a positive announcement in The Warehouse favour on this matter would let the bidding process begin.


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




The Wal-Mart Effect: How the World's Most Powerful Company Really Works--and How It's Transforming the American Economy by Charles Fishman
Buy new: $10.20 / Used from: $8.50
Usually ships in 24 hours


c Share Investor 2009

The "New" Money Manager's Investment Vehicle still tainted by its past

Even though Money Managers-the former pyramid scheme seller or what the yanks call a Ponzi Scheme-headed by Doug Somers-Edgar (pictured inset), is trying to turn over a new leaf and reinvent itself the First Step trustee Edward Russell is still talking bullshit:

"While some of the shortfall is sadly an uncontrollable inevitability in the current economic climate, where we have seen and have experienced a period of unprecedented wealth destruction across all investment sectors...

And:

Trying to put a brave face on the losses, Russell said: "This is nothing anyone here is expecting any recognition for, but the high proportion of capital returned to date does underline the correctness of the swift action we took with the First Step Trusts to close them early and liquidate in a controlled and managed fashion. "The effort in this has been huge and the result, despite the losses, has been significantly better for investors than if early action had not been taken." Stuff.co.nz, Jan 23, 2009

Now call me a thicko if you like but should investors have been told when initially putting their hard earned into Money Manager's First Step scheme that it was not only going towards lending for vehicles but the vehicle used (pun intended) to lend that money to punters was siphoned through a related party, Club Finance, where Doug Somers-Edgar was a director?

Of course they should have, because the vehicle financing business is very risky and it didn't fit the risk profile that First Step investors were informed about.

The extent of the "distancing" of the "new" Money Managers from Somers-Edgar is a little hazy.

Back in February 2008 the Sunday Star Times reported that the company was being sold to the Chief Executive at that time, Alasdair Scott, its franchisees, and NZ Funds Management, owned by Somers-Edgar business associates Gerald Siddall and Russell Tills.

At that point the majority ownership still lay in Somers-Edgars hands through trusts directly involved with him and his wife.

There was to be be an announcement regarding ownership but nowhere can it be found, either on the Internet or the Money Managers website.

When the new Chief Executive, Derek Young, was questioned in December about Somers-Edgar's current involvement in Money Managers readers got this answer:

Has Somers-Edgar entirely exited the business?

Yes... almost, is the answer, but his shadow is long. He still owns Heritage, a trustee company which administers the family trusts of thousands of Money Managers' clients. But that is a transitional arrangement, and it will change, Young says. Stuff.co.nz, December 21, 2008

This is pertinent to the issue of First Step and a number of other Doug Somers-Edgar owned related parties because they are being wound up, investors have lost their money and Doug is running for the hills with it because he is selling up!

How clever.

So the issue over his current involvement in Money Managers is unclear as is the outcome for investors in its various related parties.

What is clear however is that the "New-Improved" version of Money Managers still cannot be fully trusted.

Many of the same people still work there, as franchisees and in management, either directly, through trusts or related parties.

Current Chief Executive, Derek Young seems like a thoroughly appropriate person to be heading up a change of direction for Money Managers but you cannot expect an ailing leopard to change its spots overnight when there is a shadow of a hyena lurking in the background.

Come clean Dougy.

Related Share Investor reading

Don't forget Money Managers
Money Managers First Step gives investors the middle finger
Money Managers First Step saga: 3 Story wrap


Related Amazon Reading


Need and Greed: The True Story of the Largest Ponzi Scheme in American History by Stewart L. Weisman
Buy new: $29.95 / Used from: $4.50
Usually ships in 24 hours


You Can't Cheat an Honest Man: How Ponzi Schemes and Pyramid Frauds Work...And Why They're More Common Than Ever by James Walsh
Buy new: $19.95 / Used from: $18.93
Usually ships in 1 to 2 months


c Share Investor 2009

MarketWatch: Contact Energy

The slump in the Contact Energy [CEN] share price on Tuesday due to a 23% profit downgrade is really of little concern to the long-term investor already owning shares in the company.

It does provide an opportunity for those of us who would like to buy Contact shares though !

The downgrade had nothing at all to do with the global recession but was due mainly to bad luck, government red-tape and a gas shortage.

That doesn't mean the end of the world though.

Contact Energy still makes alot of money and will continue to do so long into the future and is a monopoly in various areas of its business

In fact it has been one of the better performers, profit and share price wise than any other stock listed on the NZX and it will do well during the recession.

The downgrade simply made the company a more attractive buy on Tuesday because the share price dropped by 10%.

The share price closed today at NZ$6.76, 16c up on yesterday's close and around 10% less than a week ago.

At a 52 week low of $6.29 this makes Contact Energy an essential on anyone's watchlist at the current share value.

Buy on weakness for a good long-term return.


Related Share Investor Reading

Contact Energy looks bright during dark times
Share Investor's 2009 Stock Picks
Follow the Monopoly Board


Contact Energy Investor Info

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

Related Amazon Reading


The End of a Natural Monopoly: Deregulation and Competition in the Electric Power Industry by Peter Grossman
Buy new: $180.00 / Used from: $156.60
Usually ships in 24 hours


c Share Investor 2009

Cancelling gab-fests sends a good message

The fuss made by Annette King today by trying to score meaningless political points over Tony Ryall for putting the kibosh on yet another expensive taxpayer funded talk fest, again shows why Annie and her free spending ilk lost the last election.

This is the second expensive meaningless talk fest to be stubbed out by National since November 2008.

Labour just don't get it.

We need to tighten our belts and every dollar counts, especially in these uncertain economic times.

The message that National are sending is that your hard earned money is important to us and we will not waste it on pointy headed useless bureaucrats.

These free spenders of taxpayer money from the Labour Party just don't care.

The money saved from cancelling just these two pointless talk fests-that rarely achieve anything except get clipboard toting bureaucrats drunk and randy on our money- would be enough to create the salaries for 6-7 well paid jobs.

Really Anette, isn't that what we really need right now.

Related Amazon Reading

An American Citizen Speaks Out! Politics and Society by Fred Schor  Buy new: $23.95 / Used from: $23.94 Usually ships in 24 hours

c Political Animal 2009