Fledgling wool company Wool Partners Co-operative is interested in the 44% stake in a competing wool processor and exporter held by interests associated with Allan Hubbard and which is in receivership.
Plum Duff Ltd, owned by Timaru financiers Allan and Margaret Hubbard, owns 44.02% of publicly-listed New Zealand Wool Services International (WSI), and Wool Partners Co-operative (WPC) chairman Jeff Grant yesterday confirmed his company had registered an interest in buying the shares with Plum Duff's receiver.
Shares in WSI last traded at 44c which would value Plum Duff's 30,592,451 shares at about $13.5 million.
However, Mr Grant said, should WPC secure the stake, the wool handled by WSI would not count towards the target WPC has set itself to start business, of farmers buying one $1 share for every kg of strong wool produced, up to a target of $65 million.
Mr Grant said WPC would not have any cash until they knew the outcome of the capital raising and that money would only be available should they exceed their self-imposed target.
WSI managing director Michael Dwyer said WPC was entitled to be interested, but for it to go further, the company needed money.
WPC directors have been in talks with other players in the wool industry about whether the Plum Duff shares could be "a strategic move" to consolidate the wool industry.
Mr Grant said any purchase greater than 19.9% would require a full takeover offer to be made, which made the share parcel strategic in the future of the wider wool industry.
The receiver has not determined the timing for the sale of the Plum Duff stake, which could be outside WPC's third and most recent deadline for farmers to buy shares in the co-operative, which is February 16.
"We've expressed an interest but nobody is absolutely sure of the time frame.
If it is beyond February 16, obviously there will be a much more logical chance of us being there."
Mr Grant said there were other strategic reasons for its interest in WSI, especially its established relationships with China.
"The Chinese market will in the long term be critical to the co-op."
Christchurch-based WSI operates two wool scours - one in the North Island and one in the South Island, buys at auction, has supply arrangements with farmer groups and is one of the country's largest wool exporters.
It has nearly 4000 shareholders with 3500 of them owning fewer than 5000 shares and 81% of shares are owned by the 20 largest shareholders.
Mr Grant said he was not sure if WPC would be interested in the scours, but they could be part of a joint venture should it succeed in buying WSI's controlling stake.
Last year WSI reported an after-tax operating profit of $2.2 million from revenue of $151 million.
