Metcash persists for Pick n Pay's Franklins

The Sydney-based company on Monday notified the Australian Competition and Consumer Commission (ACCC) that after five business days it would consider itself free to agree with Pick n Pay to waive the condition requiring ACCC approval and to complete the acquisition.

The swift move comes after last week's appeal from the Australian competition watchdog against the Federal Court judgment allowing Metcash to acquire its Franklins.

The ACCC believes that the court made a number of "legal and factual" errors in it judgement last month, which granted Pick n Pay clearance to proceed with the long-delayed sale of 80 corporate and 10 franchised Franklins stores.

It first blocked the acquisition last year, saying that the deal could mean a significant lessening of competition through the removal of Metcash's closest competitor in the New South Wales groceries sector.

On Metcash's decision to press on, chairman of Pick n Pay, Gareth Ackerman said: "We welcome this development and confirm our view that the sale of Franklins to Metcash will deliver the best outcome for Pick n Pay and its shareholders and Franklins employees.

"In our dealings on this matter, we will make sure that we act in strict compliance with the law. Further, we have consistently argued that the sale of Franklins to Metcash would enhance competition within the Australian market. The recent judgment in the federal court comprehensively rejected each of the ACCC's arguments and reinforced our views."

Pick n Pay, who had hoped for a speedy exit said it was "deeply disappointed" by the ACCC's appeal decision.

The group said a protracted appeal process was likely to have a strongly negative impact on Franklins' already weakened financial position.

"We remain very concerned about the impact this delay is having on the Franklins business and particularly our employees," Ackerman noted.

Pick n Pay intends to use the proceeds from the sale to ramp up its distribution centres.