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Godfrey Hirst Confident Merger Best Option

28 July 2005

Godfrey Hirst Confident Merger Best Option For Feltex Shareholders

Godfrey Hirst today said the company is confident that a merger with Feltex Carpets remains the best option for Feltex and to create value for the shareholders of both companies.

Godfrey Hirst Financial Director, Jim Walsh said Godfrey Hirst was now looking for a commitment from the Feltex Board to start seriously exploring the merger opportunity.

“We remain confident that a merger is the best prospect for Feltex shareholders and stakeholders of both companies, however, both parties need to get on with detailed discussions to determine if a merger can progress and if not, agree to go our separate ways.

“Substantial benefits would be realised through a merger and would be expected to include the introduction of a stable and experienced management team, utilisation of Godfrey Hirst’s proven business model, and the restoration of dividends as well as the significant benefits that would be expected to flow from rationalisation.”

In June, Godfrey Hirst acquired a 5.8% shareholding in Feltex and announced it was interested in entering into discussions about a potential merger. A preliminary meeting was held in early July with Feltex representatives.

Walsh noted that since Godfrey Hirst became Feltex’s largest shareholder, no other potential bidders for Feltex appear to have come forward, which is not surprising given the apparent merits of a merger.

“We continue to believe that a merger between Godfrey Hirst and Feltex would have benefits for both companies and their respective shareholders. We look forward to more detailed discussions with the Feltex Board” he said.

ENDS

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