25 May 2011

Wool Services takeover saga takes new turn

1:56 pm on 25 May 2011

The future of Wool Services International has taken another twist, with Cavalier Wool Holdings offering $40 million to buy the exporter and scourers' entire assets.

Cavalier Wool, which is half-owned by Cavalier Carpets, is awaiting a final decision by the Commerce Commission to buy Wool Service's scouring assets alone, after receiving preliminary approval.

The saga is complicated by the sale of a 64% stake in WSI as result of investor Plum Duff being put into receivership last year.

Wool Services International chairman Derek Kirke says the uncertainty surrounding the share sale and Commerce Commission inquiry makes it difficult to assess Cavalier Wool's offer at this time.

He says there are a lot of complications to work through before it can evaluate the offer.

In February, Cavalier Wool sought regulatory approval to buy the shares and assets of Wool Services, intending to keep the scouring assets, and selling its export trading arm.

The Commerce Commission has given a preliminary ruling in favour of the scour takeover, but WSI and some others in the industry are opposing that.

The Commission has still to make a final decision after hearing submissions.