Aulkland, New Zealand, August 3, 2006--Members of one of New Zealand's richest families are seeking to keep beleaguered carpet-maker Feltex in New Zealand hands, according to Radio New Zealand.
Privately owned Australian rival Godfrey Hirst is set to buy the indebted company in a deal worth $NZ142 million, at 12 cents a share, at best.
Auckland businessmen Graeme and Craig Turner, who run bed-makers Sleepyhead, are set to challenge that. According to The National Business Review, the Turner family is worth about $70m.
Graeme Turner says they have been interested in Feltex since its share price started dropping, and have been working on a bid for 10 months.
Mr Turner says there are synergies with his company's product, and if they are successful in acquiring Feltex, manufacturing would remain in New Zealand.
He says they have a lot of support from other local investors, but would not say who at this stage.
$128m bank debt
Feltex owes the ANZ Bank $128m. The ANZ's exposure has grown 60% in the past two years.
The bank supports Godfrey Hirst's offer, which requires the support of 75% of shareholders at a special meeting to be held in September.
It also needs the approval of the Overseas Investment Office and the Commerce Commission.
Feltex re-listed in 2004 at $1.70 a share, giving it a market capitalisation of more than $250m. As of Wednesday morning, its market cap was less than $13m - a fall of more than 90%.
"Sorry saga"
Radio New Zealand's business editor says the Godfrey Hirst offer is not enticing on face value, with investors lucky to receive between 9c -12c a share, more than 90% below the listing price of $1.70 in 2004.
Feltex chairman Tim Saunders this week said the board had agreed to support the proposal by Godfrey Hirst in the absence of any alternative. He acknowledged this week that Feltex has not been a good investment.
ASB Securities managing director, Tim Preston, says Feltex has been "a sorry saga". He believes another offer is an outside shot, and investors will have little choice.
Feltex has been generating a positive cashflow, its order books are bulging and it is paying its bills including servicing its interest costs.
Radio New Zealand's business editor says the only other option appears to be putting the company into receivership, which could see investors getting nothing.
Feltex employs about 520 people in Australia and 820 in New Zealand.
