Investors have reacted badly to a ruling by the Court of Appeal blocking Foodstuffs and Woolworths from making takeover offers for The Warehouse.
News of the ruling sent the retailer's shares tumbling by 17% on Thursday morning.
Shares in The Warehouse closed on Wednesday at $NZ3.82. They have already lost 33% to date this year.
The ruling reversed an earlier High Court ruling which allowed the supermarket groups to make bids. The Court of Appeal ordered them to pay costs to the Commerce Commission.
The commission initially declined applications to buy The Warehouse in June 2007, saying a substantial lessening of competition would result if either chain bought the discount retailer.
The two groups appealed and in November, the High Court found in favour of the supermarkets, so the commission took the case to the Court of Appeal.
The Court of Appeal said it would issue the reasons for its decision, once it decides what commercial information submitted by the supermarkets should remain confidential.
The Warehouse is about 50% owned by founder Stephen Tindall and associated interests. Woolworths and Foodstuffs each own about 10%.
All parties have 20 working days to consider seeking an application for leave to appeal to the Supreme Court.
Both Foodstuffs and Woolworths say they are disappointed by the ruling and will consider the judgement before making any decisions.
The Warehouse says it will not make any comment until it sees the court's judgement.
Victory for consumers - commission
Commerce Commission chairperson Paula Rebstock says the court's reversal of an earlier High Court decision is a victory for consumers and competition.
Ms Rebstock says The Warehouse is in a position to challenge the status quo, having opened three supercentres that stock groceries and general merchandise.
She told Checkpoint if the move had gone ahead it would have substantially reduced competition in the grocery sector from three major players to two.
Ms Rebstock says this would have disadvantaged consumers.