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Cavalier still pushing their merger and rationalisation plan despite new offer appearing for WSI from Lemprieve

Posted in Rural News

Another chapter in this long running saga for the control of NZ's wool scouring operations has been opened with a takeover offer from Australian company Lemprieve Holdings for NZ Wool Services Ltd.

With the backing of the receivers and senior management giving it a 75% acceptance of the bid, it seems likely to succeed.

However, Cavalier is not giving up on its plans to merge its scouring operation with NZ Wool Services despite this takeover bid.

Although this offer could stymie this rationalisation, Cavalier head Nigel Hales believes this merger is still on, in the face of declining wool volumes in NZ and increased competition for un-processed wools from China.

An associated company of Melbourne wool merchant Lempriere Holdings has announced a takeover offer for wool processor and the country's largest wool exporter, NZ Wool Services International (WSI) reports Stuff.

The bidder, WSI Holdings Pty Limited, has already secured 75 per cent of WSI shares through lock-up agreements with the receivers of two Allan Hubbard-associated companies which hold 64 per cent of WSI, and senior WSI managers who hold another 11 per cent.

WSI Holdings Pty will make a takeover offer for all shares in WSI at 45 cents per share. Shares in WSI were last trading on the NZAX about 37c a share.

Receivers from PricewaterhouseCoopers have been trying to offload the 64 per cent shareholding once controlled by Hubbard-associated companies Plum Duff and Woolpak Holdings for nearly two years. Once WSI's board of directors receives the takeover offer it will seek an independent appraisal on the offer, which it would send to shareholders, along with the board's recommendations.

WSI managing director Michael Dwyer and four other senior employees, together with one retired employee, have signed lock-up agreements to sell a combined 11 per cent shareholding held by them in WSI, to WSI Holdings for 45c per share. WSI's board of directors said that while the company had continued to trade profitably, having a majority of its shares tied up in two companies in receivership had meant a lengthy period of uncertainty for its employees and customers. The board therefore welcomed the prospect of a conclusion to the process, they said

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