Wednesday 25th May 2011
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Cavalier Wool Holdings has made a $40 million conditional offer for all the assets and liabilities of wool exporter and scourer Wool Services International (WSI).
WSI chairman Derek Kirke said that the board would not be in a position to fully assess the offer in the short term because of the number of significant uncertainties relating to it.
Cavalier's proposed offer was inconsistent with its application to the Commerce Commission for authorisation to buy WSI's scouring assets, as the offer extended to other assets, said.
Also, the application was still under consideration by the commission, with a decision not due until June 10.
Cavalier's offer included very limited detail, with a significant amount of work needed before the WSI board could reasonably advise shareholders as to its implications and possible returns, Kirke said.
Another factor was that the offer had been received in the midst of a sales process for nearly 64% of WSI. That process follows the receivership of the two companies that own the stake.
"The directors need this sales process to be concluded before being in a position to assess the Cavalier offer, given that the outcome of the share sale process could determine whether shareholder approval for the proposal is an option," Kirke said.
"Until the outcome of the Cavalier application for authorisation is known and the receiver's sales process is concluded, the board is most reluctant to spend shareholder resources on fully evaluating an offer that may not in fact be authorised to proceed."
The WSI board would keep the matter under close consideration and would keep shareholders and the market informed as soon as its deliberations have resulted in a view for shareholders.
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