Cavalier Makes Conditional Offer For WSI

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Cavalier Makes Conditional Offer For WSI

The directors of New Zealand Wool Services International (WSI) advised today that they have received from Cavalier Wool Holdings Limited (Cavalier) a conditional offer of $40 million for all of the assets and liabilities of WSI.

WSI Chairman Derek Kirke said that while the Board would endeavour to evaluate the offer in terms of its potential value for shareholders, it 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.

"The first issue is the Commerce Commission process. Cavalier has applied to the Commerce Commission for authorisation to make an offer for WSI's scouring assets. The proposed offer from Cavalier is inconsistent with that application as it also extends to other assets. Furthermore, the application is still under consideration by the Commerce Commission, with a decision not due until 10 June.

"Secondly, there is very limited detail in the offer and a significant amount of work would need to be carried out before the Board could reasonably advise shareholders as to its implications and possible returns.

"Thirdly, the offer has been received in the midst of a sales process for a 64% shareholding in WSI. 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.

"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", said Mr Kirke.

He said that the Board would keep the matter under close consideration and will keep shareholders and the market informed as soon as its deliberations have resulted in a view for shareholders.

ENDS

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