A Bell Potter analyst is guessing that another KKR bid will be put on the table at $17, and it will be accepted. Others think it’s all over.

Maybe it’s over for Coles, but realigned retail ownership remains the rage. Across the Tasman, The Warehouse, having retreated from the Oz market, was moving back to private ownership. However, the plan has hit a hurdle or two.

The Warehouse was founded by Stephen Tindall. Tindall is an icon – and a much gonged one. A few years ago, a poll showed that the majority of Kiwis wanted him as head of state. He is admired as a combination of Dick Smith, Steve Irwin, Mother Teresa and Bill Gates (in a NZ sort of way).

Tindall was always said to own 51% of The Warehouse, but was willing to share the balance with his fellow citizens. And very good of him it was too.

Two weeks ago, Tindall announced that he would like the 49% back, thank you very much. He wanted to take the company private. He and his backer, Private Equity Partners, offered shareholders $5.75 a share. It seems it was an ill-prepared bid.

Woolworths stepped in and quickly acquired a 10% stake at $6.00-6.50 a share.

Now we read that the 51% Tindall stake may not all be his to control. Tindall had placed 21.7% of the company in the hands of The Tindall Foundation, a charitable trust whose board is compelled to act “in a manner which the board thinks will benefit the trust fund”. The question is whether privatisation is good for the trust, especially when the reason for going private is the risks associated with Tindall’s plans to expand The Warehouse into groceries. Would anyone be surprised by litigation?

It’s unclear whether Woolworths wants the company, or to influence the outcome.
Tindall, hometown hero and a man very used to getting his own way, may find himself selling his own stake to those bast-rds from across the ditch. And that would be right up there with Aussies claiming Phar Lap, Pavlova and Russell Crowe as ours. Well, perhaps not Rusty.

Peter Fray

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