Curtis Wool Direct

Further appeal delays NZ merger

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Godfrey Hirst’s High Court appeal against a merger of New Zealand’s largest wool scouring operations was dismissed, allowing the creation of a dominant scourer involving rival carpet maker Cavalier Corp. But as Godfrey Hirst has done, in the past, and to other companies, it has again appealed this latest decision, putting this merger on hold again.

As one industry leader commented ‘it is actually unbelievable that one company can hold up such a needed merger’.

The difference this time is that NZWSI and Cavalier can claim costs from Godfrey Hirst if the decision goes against it.

In its press release Cavalier Wool Holdings said that it is ‘disappointed but not surprised’ by Australian owned carpet maker Godfrey Hirst’s decision to launch another appeal against its proposal to merge its wool scouring operations with NZ Wool Services International (NZWSI).

“There is currently excess wool scouring capacity in New Zealand, this proposal is about consolidating assets and realising efficiencies in order to keep wool processing in the country longer term.”

“We want to avoid what has happened with off-shoring of scouring in Australia and instead create a single, internationally competitive wool processing entity in New Zealand.”

“It is disappointing that despite the Commerce Commission ruling in favour of the merger and Godfrey Hirst recently losing an appeal against this in the High Court they have chosen to continue to draw this out and launch yet another appeal.”

CWH is owned by Cavalier Corporation, the Accident Compensation Corporation (ACC) and local private equity firm Direct Capital. Under the merger proposal CWH NZ shareholders will have the majority shareholding with 55% of the merged company and Lempriere (international parent owners of NZWSI) 45%. Lempriere will need Commerce Commission approval to increase its shareholding beyond 45%.

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