Friday, 24 June 2016 12:25

Cavalier Wool disappointed with new appeal

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Cavalier Wool Holdings (CWH) is 'disappointed but not surprised'.

Australian owned carpet maker Godfrey Hirst has made the decision to launch another appeal against CWH's 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," it says in a statement.

"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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