Anchorage keen on stake in Australia's Mitre 10 

Source: NZPAMitre 10

Anchorage Capital Partners chairman Phillip Cave has appealed to shareholders of takeover target Mitre 10 with reassurances the private equity firm would not on-sell the hardware group quickly if its bid was successful.

Cave said Anchorage stood by its track record of turning around companies including the Golden Circle group and would maximise value for Mitre 10's shareholders if Anchorage obtained a minority stake in the company.

"The number one priority is that the offer needs to make sense for Mitre 10 and its shareholders," he said in a statement on Sunday.

Anchorage is seeking to buy between 40 and 49% of Mitre 10 and is in a takeover tussle with Metcash Ltd which is in negotiations to buy an initial 50.1% stake.

Metcash's chief executive Andrew Reitzer on Friday set out the advantages of choosing the grocery wholesaler over Anchorage.

"Private equity is all about short term gain, short term sucking money out of the business, whereas we're a long term player, so they've got a very interesting choice.

On Sunday, Cave hit back saying: "Our position is that we are in there for however long it takes to add value. It's not restricted to a two or three year period."

If Metcash is successful in its bid for Mitre 10, Metcash hopes to take full control of the hardware chain's wholesale operations in 2012 or 2013.

Reitzer said Metcash had seen the numbers during its due diligence of Mitre 10, and its offer on the table was "very strong".

He didn't elaborate on the content on the bid as it is confidential.

Mitre 10, which supplies more than 400 stores across Australia, is expected to make its decision on the successful bidder within the next two weeks.

The hardware group, which is owned by individual store owners, on Wednesday announced its pre-tax result for the first four months of 2009/10 had swung to a profit.

It said earnings before interest and tax (EBIT) of $AU2.67 million for the month of October had boosted total EBIT for the four months to October 31 to $AU6.44 million, from a loss of $AU239,000 in the corresponding reporting period.