Woolworths (WOW) said it will oppose the appeal by the New Zealand Commerce Commission (NZCC) against the NZ High Court's decision which allows Woolies to bid for New Zealand's largest discount retailer, The Warehouse Group.
The Commerce Commission said it would seek leave to appeal the decision which cleared the way for Woolworths and Foodstuffs to make takeover bids for The Warehouse Group, listed both in NZ and in Australia.
Woolworths said on Tuesday it was surprised and disappointed that the NZCC was seeking an appeal which has caused a delay of almost a year since the retailer sought clearance.
"Should the appeal be granted, it would result in further delay, prolonged uncertainty for The Warehouse shareholders and creates significant ambiguity for companies wishing to invest in the New Zealand market."
Last month the High Court overturned the commission's earlier decision to decline clearance for either potential acquisition.
"In that decision, the High Court found against the Commerce Commission and confirmed that the regulator should not have denied Woolworths clearance to acquire the assets or shares of The Warehouse Group," Woolworths said in a statement.
Nevertheless, the commerce commission said it remains concerned about competition in the supermarket sector where Woolworths and Foodstuffs operate a duopoly, minus the three regions where The Warehouse has opened Extra-branded stores.
"Appealing the judgment is important given the precedent it sets for the application of competition law in New Zealand, and the implications this has for the long-term interests of supermarket consumers," said commission chair Paula Rebstock.
Woolworths and New Zealand-based rival Foodstuffs dominate the New Zealand grocery market, and now both own 10 per cent stakes in The Warehouse.
The supermarkets took these respective stakes in the discount retailer last year in an attempt to defend themselves against the company's move into perishable groceries with the launch of its expanded The Warehouse Extra stores.
Foodstuffs applied for clearance to acquire up to 100 per cent of shares in The Warehouse last December and Woolies followed suit in January.
But in June, the regulator blocked the companies' applications for clearance to make takeover offers on the grounds that the acquisition would reduce competition in the markets they operate in.
The commission said today that it is seeking to have the current matter dealt with urgently, and will file an application today for leave to appeal the High Court judgment.
It is also seeking a stay of execution of the judgment pending the determination of any appeals, which would effectively delay any planned action by Woolies or its rival Foodstuffs.
Shares in Woolworths fell by 1.51% or 52 cents today to trade down at $33.83 at 1:00PM AEST.
