A first step has been taken towards a potential major shakeup of The Warehouse Group's ownership.
The struggling group yesterday issued a "don't sell" notice on the NZX after it received an approach from founder Sir Stephen Tindall and Australian investment manager Adamantem.
Sir Stephen started The Warehouse in 1982 and was managing director until 2001.
He owned around 27% of the company while the Tindall Foundation owned about 21%.
In a market update on the NZX this morning, The Warehouse Group announced it had received from Adamantem "an unsolicited, non-binding, indicative proposal with a view to entering into discussions about a potential acquisition of all of the Company's shares".
The indicative proposal included a proposed price in the range of $1.50 to $1.70 per share. At 11am today, the company's shares were priced at $1.43 on the NZX. The company's share price increased yesterday after news of the approach.
If it went through as proposed, the deal would see private equity firm Adamantem buy 100% of the company's shares – but Sir Stephen and The Tindall Foundation would maintain involvement by reinvesting a portion of the consideration in the acquirer (up to 50%). All other current shareholders would receive an all-cash offer for their entire holding.
"If the Proposal is to proceed, shareholders will be required to vote to approve the Proposal. One part of that vote is that a resolution to approve the Proposal must be passed by a majority of 75% of the votes of the shareholders in each interest class entitled to vote and voting on the Proposal. Given the Founder Shareholders are to receive the right to re-invest and this is not being provided to other shareholders, the Founder Shareholders may not be in the same interest group as other shareholders.
"There is no indication from Adamantem Capital that any other shareholder has given a commitment to vote in favour of the Proposal at this time.
"The Proposal is incomplete and conditional and, as a result, there can be no certainty that any transaction will eventuate."
One of our most recognisable retailers may soon transform into a supermarket. (Source: 1News)
The Warehouse Group has formed an independent subcommittee of its board to respond to the proposal.
It comes amid a tough period at the retail group, which is focusing its efforts around The Warehouse, Warehouse Stationary and Noel Leeming. Chief executive Nick Grayston left earlier this year and the company is bracing for a drop in earnings.
Jobs are also on the line at its head office.
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