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Grocer Metcash can press ahead with its much-delayed $215 million bid to purchase the Franklins supermarket business, the Federal Court ruled on Tuesday.
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The Australian Competition and Consumer Commission (ACCC) had sought to block the sale while it appealed an earlier ruling but Justice Peter Jacobson dismissed the regulator's application.
Justice Jacobson said the parties were free to complete the transaction, first announced in July last year, ahead of the appeal being heard next month.
"The interlocutory application brought by the Australian Competition and Consumer Commission will be dismissed," Justice Jacobson told the court.
In his published reasons, Justice Jacobson cited evidence from Franklins acting managing director Ronald Perlov, who said the delay and uncertainty around the transaction had contributed significantly to Franklins' poor and worsening performance.
Mr Perlov told the court the continued existence of Franklins in its current form depended upon the takeover being completed within a short period, otherwise the company needed to make a choice about how to proceed given continuing losses.
"Even if I were to grant interim relief, the status quo is unlikely to be preserved until the determination of the appeal," Justice Jacobson wrote.
"That is a strong factor to be weighed in the balance against the grant of interim relief."
Last month, the ACCC lost its Federal Court bid to stop Metcash proceeding with a $215 million purchase of the Franklins supermarket business from Pick n Pay Stores of South Africa.
The ACCC was asking the court to put the transaction on hold while it appealed the decision, which it said contained legal and factual errors.
Justice Jacobson said the ACCC did not point to any glaring error or obvious oversight in the original judgement.
The issues raised by ACCC barrister Allan Myers, QC, "cannot be said to be anything other than debatable", Justice Jacobson wrote.
The appeal was set down to begin in the Federal Court on October 24 and run for three days.
ACCC chairman Rod Sims said the regulator "remains committed to the appeal process" and welcomed the court's decision to expedite the hearing.
"A speedy resolution will be in the best interests of all the parties," Mr Sims said in a statement.
The chairman of Franklins owner Pick n Pay, Gareth Ackerman, said the sale of Franklins to Metcash would deliver the best outcome for all concerned: Pick n Pay, its shareholders, Franklins employees and Australian consumers.
"We are optimistic the appeal court will reach a similar conclusion," Mr Ackerman said in a statement.
Metcash closed up four cents, or 0.98 per cent, at $4.12, on a day the broader market finished down one per cent.
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20/09/2011 21:07Sydney, Australia. 20 September,2011
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