24 Nov 2011

Court rejects attempt to stop bid for wool scours

12:43 pm on 24 November 2011

The High Court has dismissed an appeal against Cavalier Wool Holdings trying to gain control of all of the country's wool scours.

Cavalier Wool, which is half owned by carpet maker Cavalier Corporation, wants to buy Wool Services International's assets for $40 million.

It intends selling Wool Services' trading arm and keeping its scouring business, arguing rationalisation is needed to compete with Chinese rivals.

The move had been approved by the Commerce Commission but carpet maker Godfrey Hirst tried to get that decision overturned, saying it was flawed.

The High Court rejected the company's argument, although the details remain confidential for now.

Cavalier Wool chief executive Nigel Hales says it is still committed to the proposed deal, despite the difficult times facing its half owner.

Godfrey Hirst general manager Tania Pauling argues the decision is a bad one, and the scouring monopoly that would be created if Cavalier Wool is successful may prompt it to shift more of its processing overseas.