UPDATE 2-NZ regulator to appeal Warehouse takeover decision

(Adds company and analyst comment, updates share price)

By Adrian Bathgate

WELLINGTON, Dec 18 (Reuters) - New Zealand's competition regulator said it would appeal against a court decision to allow takeover bids to be made for The Warehouse Ltd (WHS.NZ), sending shares in the country's largest retailer down 11 percent.

The regulator's move could mean a delay of up to six months before a concrete bid emerges, with investors worried there may be no offer at all, said Goldman Sachs JBWere investment manager Mark Warminger.

New Zealand's High Court last month overturned a decision by the Commerce Commission preventing supermarket rivals Foodstuffs and Woolworths (WOW.AX) from bidding for the discount retailer.

Shares in The Warehouse last traded 11 percent lower at NZ$5.52, having traded between NZ$4.94 and NZ$7.32 over the past year, and valuing the company at NZ$1.7 billion ($1.3 billion).

"Without the Commerce Commission seeking to appeal, Woolworths and Foodstuffs would have put a bid in in the next few weeks," Goldman's Warminger said.

The Commission said it was filing an urgent application to be given permission to appeal and also an order to halt the implementation of the court judgement.

Both Woolworths and Foodstuffs said they would oppose the regulator's appeal.

New Zealand's High Court ruled that a takeover of The Warehouse was no threat to competition in the country's grocery sector because its planned move into grocery retailing with its Warehouse Extra stores was likely to be limited in scale.

The court's ruling opened the way for the two supermarket chains, which each hold 10 percent stakes in The Warehouse, to launch formal takeover offers for the group, which sells a broad range of general merchandise in its 85 "Red Shed" stores.

Woolworths and local co-operative Foodstuffs dominate grocery retailing in New Zealand. Foodstuffs has about a 53 percent market share and Woolworths 47 percent.

"Should the appeal be granted, it would result in further delay, prolonged uncertainty for The Warehouse shareholders and create significant ambiguity for companies wishing to invest in the New Zealand market," Woolworths said in a statement.

Foodstuffs Managing Director Tony Carter said he was disappointed by the move and believed The Warehouse did not pose a threat to grocery retailing.

The Commission said in a statement on Tuesday that it remained concerned about competition in the supermarket sector, seeing a duopoly in place in some regions.

The Warehouse is about 50 percent owned by founder Stephen Tindall and interests close to him. Tindall said at the Warehouse's annual meeting this month that he was open to offers.

Analysts have said that Woolworths would have a better chance of winning any takeover battle because of its financial strength.

The Australian retailer is worth about A$42 billion ($37 billion) on the stock market, while Foodstuffs is estimated to have a capital base of about NZ$1 billion. ($1=NZ$1.32, A$1.17) (Additional reporting by Kazunori Takada and Victoria Thieberger; Editing by James Thornhill and Jan Dahinten)