Metcash and Pick n Pay are free complete the $215 million Franklins deal after the Federal Court refused to grant the Australian Competition and Consumer Commission (ACCC) an injunction.
The ACCC sought to block the deal as it scrambles to launch a full appeal, as the sale will severely lessen competition in the sector and remove Metcash’s only actual competitor in supplying pre-packaged groceries to retailers, the AFR reports.
It claims that allowing the sale will harm the ACCC’s ability “to block anti-competitive mergers and so protect consumers in the future”.
Despite this, both Metcash and Pick n Pay will delay the deal, waiting on the outcome of the ACCC’s appeal.
Federal Court judge Peter Jacobson has announced he will accelerate the appeals process, which may result in a judgment as soon as December.
The ACCC welcomed the news, chairman Rod Sims stating: “A speedy resolution is in the best interests of all the parties.”
However, Jacobson added that Pick n Pay and Metcash were free to carry out the deal before the appeal is heard on 24 October.
Deutsche Bank analyst Michael Simotas told the AFR that while the judge’s decision is a vicoty for Metcash, he doubted the deal would go ahead before the appeals decision.
It was revealed earlier this month that Franklins was unlikely to keep trading in 2012 due to its serious financial troubles.
It is “all downhill,” he said, with a “bleak” future and much “doom and gloom,” according to an affidavit from acting Franklins chief executive Roni Perlow.
Allan Myers, barrister for the ACCC , said the expedited hearing, would solve the issue.
Image: The Australian