Wholesale grocer Metcash Trading has announced that it intends to make an off-market takeover offer to acquire the entire issued share capital of Australian supermarket group Foodland Associated.


Foodland described the offer as a “complex and highly conditional proposal”. The board of Foodland said it is currently reviewing the details of the proposal and assessing its implications for shareholders. In the meantime it advised shareholders to take no action.


“This proposal is surprising given the extent of the recent detailed and confidential negotiations we have been having with Metoz (the controlling shareholders of Metcash) and its major South African shareholders, as well as recent discussions with Metcash,” said Foodland group managing director, Trevor Coates.


Under the proposed offer, Metcash said Foodland shareholders will retain ownership of Foodland’s New Zealand business, whilst Metcash will acquire Foodland’s Australian business. The offer values Foodland Australia at A$846m (US$657.3m) or A$7.18 per Foodland share.


“The takeover offer for Foodland (…) represents a win-win outcome for both Foodland and Metcash shareholders. This is a transaction where both sets of shareholders can participate in significant value creation,” said Andrew Reitzer, chief executive officer of Metcash.

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