The Court of Appeal has prevented Woolworths and local co-operative Foodstuffs to bid for The Warehouse, New Zealand's largest listed retailer in a deal that could be worth over NZ$2 billion ($1.5 billion).
In a summary of its decision, the Court of Appeal said the appeal of the Commerce Commission against a High Court decision letting the two retailers lodge takeover bids would be allowed.
It set aside the clearances granted in the High Court and ordered the two supermarket chains to pay costs to the regulator.
Shares in The Warehouse closed on Wednesday at $NZ3.82 after trading between $NZ3.77 and $NZ6.66 over the past 12 months.
The Commerce Commission argued that if either supermarket chain bought The Warehouse, it would result in a substantial lessening of competition.
The Warehouse sells a broad range of general merchandise in its 85 "Red Shed" stores. It is about 50 per cent-owned by founder Stephen Tindall and interests close to him, while Woolworths and Foodstuffs each own about 10 per cent.
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