Archive | Takeovers

Mitre 10 receivership gives Bunnings foot into central Wellington

Published 25 January 2010

Building supplies retailer Bunnings Ltd has bought the lease on the Mitre 10 outlet in Tory St, central Wellington, from the receivers and plans to open a new store there in the first quarter of the year.

 

The Tory St site became available when Brian Mayo-Smith & Andrew Bethell (BDO Spicers Ltd) were appointed receivers of the companies owned by Auckland property developer Rob Vincent which ran 3 Mitre 10 stores in Wellington. The other 2 sites are in Crofton Downs & Kilbirnie.

 

Bunnings’ national property & development manager Dan Kneebone said on Friday: “Wellington has traditionally been a successful market for Bunnings, and the new store will provide trade & DIY customers access to an even wider range of products in the building & home improvement sector”.

 

Mr Kneebone said Bunnings would discuss ongoing employment opportunities with existing shop staff and intended to make a significant investment in the 3200m² Tory St store despite the recent challenging economic market conditions.

 

Bunnings entered the New Zealand market in 2001 through the acquisition of Benchmark Building Supplies and has invested more than $300 million in New Zealand, growing the chain to include 17 large-format Bunnings Warehouses & 25 small-format stores. The first purpose-built Trade Centre opened in East Tamaki this month and construction is well advanced for the new Bunnings Warehouse Dunedin. New stores have also been announced for Te Awamutu & Glenfield.

 

In Wellington, the Tory St acquisition gives Bunnings a foot into the central city market. The company will also upgrade its Lyall Bay store this year to a large-format Bunnings Warehouse. Its other warehouse-format stores in the region are at Porirua & Naenae.

 

Mr Vincent is also a director of Albany Hardware Holdings Ltd, Chaffers Properties Ltd, Lighter Ltd, Norfolk Mangawhai Ltd, Paradigm Management Ltd, Waiheke Properties Ltd, Warkworth Commercial Properties Ltd & Warkworth Grange Property Investments Ltd. Law firm Glaister Ennor’s application to wind up Chaffers is due in court on Friday 12 February, and its application to wind up Warkworth Grange is due in court on Wednesday 10 February.  

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Attribution: Company release, story written by Bob Dey for the Bob Dey Property Report.

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Commission gives reasons for clearing Borders acquisition

Published 21 December 2007

The Commerce Commission has released its reasons for granting clearance to A & R Whitcoulls to acquire 100% of the shares in Borders NZ Ltd.The commission said yesterday its reasons included:

 

A & R Whitcoulls was likely to continue to face price competition from other existing book retailers, such as The Warehouse, Kmart, Paper Plus & Dymocks, and non-price competition from book retailers such as Dymocks & Unity. Internet retailers were also likely to provide some degree of competitionIt’s likely that these existing book retailers would be able to expand and exert additional constraint on A & R Whitcoulls by sourcing more books through existing supplier relationships and securing larger retail spaceNew entry, in the form of retailers which currently have a network of bookshops, is likely to act as a constraint on A & R Whitcoulls. In addition, once established in a market, new entrants are unlikely to face barriers to expansion, andA & R Whitcoulls is a large purchaser of books from publishers, but this acquisition is unlikely to give it any undue market power as a buyer in the publishing market.

The commission granted A & R Whitcoulls clearance on 20 November to acquire 100% of the shares in Borders NZ.

 

Earlier stories:

23 November 2007: Borders paints a brighter picture, at least in its international business

21 November 2007: Whitcoulls cleared to buy Borders

28 March 2007: Borders reports loss, seeks “strategic alternatives” for international portfolio

 

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Attribution: Commission release, story written by Bob Dey for this website.

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Hellaby adds Number 1 to its shoe portfolio

Published: 28 June 2005


Hellaby Holdings Ltd has agreed to purchase Discount Shoe Warehouse Ltd, trading as Number 1 Shoe Warehouse.


Hellaby will acquire an 80% shareholding in Number 1 on 1 July and the remaining 20% on 31 August 2007.The price will be based on a multiple of Number 1’s ebit over the 4 financial years to August 2005-08, less external debt at those dates.Hellaby managing director David Houldsworth said “if Number 1 trades in line with forecasts over the next 3 years, the total consideration would be in the order of $22 million.”Number 1 is a specialist discount shoe retailer operating predominantly in a different market segment from Hellaby’s other shoe retailing interests, Hannahs & Hush Puppy. Mr Houldsworth said it was complementary and would be run as a completely separate business.


“Gerard Peterson, managing director & major shareholder of Number 1, will continue to run the business for at least the next 2 years and will remain as a consultant and director of the business for at least the next 4 years.” Number 1 has 29 stores and, with Hellaby support, intends to increase this to 40 over the next 3 years, as well as continuing the upgrade of existing smaller stores.”Number 1 has enjoyed strong new-store & same-store sales growth over the past 12 months. It is an excellent business with continued growth prospects and operates in a business area where the Hellaby Group already has a significant level of expertise,” Mr Houldsworth said.


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Smith’s Sound Mt Eden purchase takes Eastern Hi Fi to 9 stores

Published: 24 May 2005


Eastern Hi Fi Group Ltd’s retail subsidiary, Eastern Hi Fi Ltd (both headed by Stephen Allbury), has bought the trading assets of Smith’s Sound Hi Fi Ltd (Phillip & Jennifer McIssac), which has a shop in Mt Eden.


 


Eastern Hi Fi now operates 9 stores. It will continue to trade this one under the Smith’s Sound name, but use the Eastern Hi Fi management systems.The vendors have the right to buy the business back in 3 years, but with the condition that it continue to operate as a non-branded Eastern Hi Fi franchise store.


 


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Smiths City purchase of LV Martin set for November completion

Smiths City Group Ltd will complete its purchase of the business assets of Wellington-based appliance & electronic products retailer L. V. Martin & Son Ltd, including its Ngauranga Gorge property, on 1 November.


The purchase will be by a new company, 80% owned by Smiths City & 20% by LV Martin chief executive Trevor Douthett.


Smiths City chairman Craig Boyce told the company’s annual meeting a return to the North Island was a key part of the company’s business strategy.

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Woolworths buy to cost Progressive $690 million

Injunction lifted

Second update, 14 June: Foodland Associated Ltd and its New Zealand supermarkets subsidiary, Progressive Enterprises Ltd, have managed to have an interim injunction against their purchase of the New Zealand Woolworths chain lifted.

Injunction halts merger; ruling awaited on FAL quest to defeat it

But as the next step by the biggest supermarket group & opponent of the takeover, Foodstuffs, is expected to be a request for a judicial review of an Overseas Investment Commission action, Foodland’s $345 million issues to finance the $690 million acquisition has been suspended by organising broker/underwriter JB Were Ltd.

Update, 14 June: Foodstuffs sought an injunction in the Auckland High Court to stop further action on the takeover and was granted an interim decision in its favour. Progressive Enterprises went back to the court yesterday to have that decision over-ruled, and a decision is due out Friday morning.

Foodland boss claims merger will bring market share

The shakeup of the nation’s supermarket industry was finally confirmed today, when Perth-based Foodland Associated Ltd announced its New Zealand supermarket subsidiary, Progressive Enterprises Ltd, would buy Woolworths NZ Ltd from Dairy Farm International of Hong Kong for $690 million, half financed by bank debt and the other half by 2 equity issues to institutions underwritten by JB Were.

Progressive has 68 supermarkets, Woolworths 85 with combined turnover of about $3.2 billion. The 3 Foodstuffs co-operatives have 166 supermarkets, about $4.8 billion turnover & 55% of the market.

Foodland managing director Trevor Coates claimed the merger into “a more dynamic business” would result in “increased market share” for the Progs-Woolworths combination: “We expect that synergy benefits of the combined group will emerge over a 3-year period.

“These will be driven by a combination of brand rationalisation, reduced marketing costs & supply chain economies. The increased purchasing power of the group for both national & corporate brands will ultimately allow the combined business to be a more effective competitor to the dominant market leader, resulting in increased competition and better choice & value for the New Zealand consumer.”

Sounds good, but 1 reason Foodstuffs has such a big market share is that for nearly 20 years Progressive has either trod water or gone backwards. Foodland’s new New Zealand plan is to open at least 5 new supermarkets/year and to spend at least $45 million/year in capital spending on Woolworths.

After the institutional placement & rights issue, other Foodland shareholders will be offered the chance to subscribe on identical terms.

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Appeal Court stymies Progs’ bid for Woolworths

Foodstuffs appeal holds opposition traders apart

Foodland Associated Ltd’s New Zealand subsidiary, Progressive Enterprises Ltd, will seek an urgent legislative solution to clear the way for it to buy the Woolworths retail chain.

The Commerce Commission said the dominance law applying on 26 May would apply to all applications made by that date — this one and 10 others. That was also what a full bench of the High Court ruled.

The Commerce Amendment Act came into effect on 29 May, and the Appeal Court has overturned the High Court judgment, saying the Commerce Commission could not apply the old dominance test to the transaction.

Progressive’s managing director, Ted van Arkel, said the proposed acquisition would mean a combined market share of 40% for Progressive/Woolworths against Foodstuffs’ 55%. Progressive has 21% of supermarket sales and
Woolworths 19% now.

Dairy Food of Hong Kong decided to quit its Franklins retail chain in Australia, then got offers for Woolworths in New Zealand. Foodstuffs NZ Ltd opposed the bid by Progressive.

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