Australians secure 83pc of WSI
Australian wool merchant Lempriere Holdings is inching closer to success in its $31 million takeover bid for wool processor New Zealand Wool Services International.
An announcement to the market yesterday reported that WSI Holdings, associate company of Lempriere, had secured 83.84 per cent of shares in New Zealand's largest wool exporter by December 24.
If WSI secures 90 per cent of the shares on offer, it can compulsorily acquire the remaining shares in the company.
WSI made a formal offer of $31m or 45c a share to New Zealand Wool Services International shareholders in October.
WSI had already secured 75 per cent of Wool Services shares through pre-bid "lockup" agreements with the receivers of Allan Hubbard-associated companies Plum Duff and Woolpak Holdings, Wool Services managing director Michael Dwyer, and some senior employees, for 45 cents a share.
That price means the receivers of Plum Duff and Woolpak Holdings will get $19,974,726 for their 64 per cent stake in Wool Services. The offer closes on February 24.
If WSI acquires all the shares, it plans to delist the company.
An adviser's report by Northington Partners put the full underlying value of Wool Services' shares in a range between 38c and 47c a share. Wool Services shares last traded at 42 cents a share.
Hamilton Hindin Greene director Grant Williamson said recent trades after the announcement of the takeover had been in such small volumes that it was probably just a "tidy-up" exercise by some portfolios or estates. It was possible some smaller shareholders may have been looking to take cash for their shares straight away.
With the trades in such low volumes, there would not be much depletion of value even though the trades had been below the takeover offer price, he said.
In the target company statement, independent directors Derek Kirke, Herbert Govan, David Houldsworth and Peter Jackson recommended that shareholders accept WSI's offer.
They said the receivers had accepted WSI's 45c-a-share offer as the best available; WSI would have a 75 per cent controlling stake in Wool Services once conditions were met; and the offer was near the high end of the value range given by the independent adviser for Wool Services shares.
Lempriere has said it intended to continue to operate Wool Services as New Zealand's only merchant wool scourer.
- © Fairfax NZ News
Do you think state schools should conduct religious instruction for primary-aged children?