Takeover bid for 75% of Wool Services

A 75% stake in carpet wool exporter New Zealand Wool Services International has been locked up in a takeover bid by Australian company Lempriere Holdings Pty Ltd of Melbourne for $23.2 million.

There is an additional $7.8 million on offer for the outstanding 25% of shares it does not own.

Wool Services, which was established out of the former New Zealand Wool Board and listed in late 1997, has been under a cloud for some time after the Commerce Commission granted authorisation last year to Cavalier Wool Holdings to make an offer for its wool scouring assets.

Wool Services later confirmed it was planning to raise capital in its attempt to buy the 64% of the company owned by deceased financier Alan Hubbard's Plum Duff and Woolpak Holdings, which was under the control of receivers.

Listed Wool Services' business model is based on a woolgrower, to scours - in either the North or South Islands - to then export carpet wools.

Plum Duff Ltd and Woolpak Holdings Ltd were placed in receivership in December 2010 and held 64% of Wool Services, which has been locked up for sale to Lempriere Holdings at 45c per share.

Additionally, a further 11% of Wool Services shares held by five senior employees and another retiree were locked up for sale to Lempriere Holdings yesterday.

The two purchases are worth about $23.2 million.

Craigs Investment Partners broker Chris Timms said the remaining 25% of shares at 45c was valued at about $7.8 million.

Wool Services chairman Derek Kirke told markets yesterday he was informed by the receivers, then employees, that "lock-up agreements to sell" had been signed with Lempriere subsidiary WSI Holdings Pty Ltd to sell their respective 64% and 11% stakes.