Auckland, New Zealand, August 4, 2006--Leading Australian carpet manufacturer Godfrey Hirst says its offer for Feltex remains far better than a new proposal which emerged on Thursday, according to TVNZ.co.nz.
Brothers Graeme and Craig Turner from the Sleepyhead bedding group are planning a $25 million to $40 million partial underwrite of a rights issue to enable the company to keep on manufacturing in New Zealand.
Feltex's share price edged up $0.01 on the news, to $0.10 a share.
Graeme says a meeting with Feltex directors on Thursday night went well.
Craig says the directors were very positive about their proposal and say they will look at it further.
Godfrey Hirst says its existing $142 million offer is fully funded and ready to go, while the Sleepyhead plan is still in its early stages.
But Graeme says they have secured at least 50% of the $35 million they estimate Feltex will need to help reduce its debt.
The Turners have been working on the proposal for 10 months.
Graeme says he expects to have a firm offer on the table before the September deadline.
Feltex owes the ANZ Bank NZ$128 million.
The bank has so far supported Godfrey Hirst's offer as it allows it to reclaim most, if not all of the money it is owed.
This leaves Feltex's board in a difficult position. While their bank is an important stakeholder, the directors also have a duty to put any superior offer to shareholders for them to consider.
The longer term promise of a higher share price than $0.12 may be enough to see shareholders turn down Godfrey Hirst's offer at next month's special meeting.
But a director at Milford Asset Management, Brian Gaynor, believes momentum still favours Godfrey Hirst.
Neither ANZ Australia nor the Feltex board is commenting, but Godfrey Hirst's general manager in New Zealand, Tania Pauling, says its offer gives investors certainty.
