Stephen Tindall could yet be involved in a new takeover bid for The Warehouse alongside supermarket operator Foodstuffs and private equity investor Pacific Equity Partners.
Market sources say the three may be seeking to work together on a deal to rival the expected bid from Australian supermarket giant Woolworths.
One source said: "We could see a joint venture formed with Stephen and potentially the (Tindall) Foundation having 33-50%, PEP 25-33% and Foodstuffs with 25-33%. Potentially we could see them all with thirds.
"The working proposition is that (Tindall) is involved in it."
Tindall, who returns from holiday this week, controls 51% of The Warehouse, mainly through his personal holding of 27% and the 21% owned by the Tindall Foundation, a charity he set up in 1995. The Warehouse founder's position is therefore critical to the competing ambitions of Foodstuffs and Woolworths.
Sources say Tindall will ultimately go with the highest offer, even if it comes from Woolies.
A source said: "But if (a three-way deal with PEP/Foodstuffs) is the best offer on the table and the best price and all the rest of it, then I guess it's something he can look at."
The Warehouse's share price has leapt since September when Tindall proposed taking the company private. He was offering $5.75 a share, well above the then share price of around $5.
Later that month Woolworths bought 10% for $196.4 million, paying an average $6.43 a share for its stake, matching Foodstuffs' 10% holding and fuelling speculation of a takeover battle.
Both Woolworths and Foodstuffs have applied for Commerce Commission clearance to buy The Warehouse.
Last week the shares were trading around $7.24, a level unseen since 2002, valuing the company at $2.2 billion.
It's a steep valuation for a retailer that has struggled to grow.
"Increasingly at the prices being talked about, realistically Stephen is a seller," said another source.
Both sides can afford to pay a takeover premium, although analysts say Woolworths has the most to gain from merging The Warehouse with its existing New Zealand operations.
But recent merger and acquisition activity has been dominated by private equity firms such as PEP, with bigger appetites for risk and willingness to take on more debt than listed companies, to secure control of takeover targets.
In December PEP and CCMP Capital Asia bought Independent Liquor for a reported $1.2b, a price rival bidder Lion Nathan found too rich for its tastes.
PEP will proceed with a Warehouse purchase only if its consortium can secure 100% ownership.
"The problem's going to be getting Woolworths to sell," said a market source. "They won't be interested in making a lazy $25-$50m and walking away."
Conversely, Foodstuffs may be more inclined to do so.
"Because of Foodstuffs' co-op structure and its Warehouse shareholding forming a large part of its corporate wealth, it will walk away at some point," he said.
