Cliff Cook joins brothers' Feltex rescue

Another rich-lister has joined Graeme and Craig Turner's bid to rescue the ailing carpet-maker Feltex.

Cliff Cook - who made his fortune of $200 million, according to the NBR Rich List, building up and then selling retirement home operator Metlifecare - is prepared to back the Turners.

He would not disclose how much he wanted to put in but said the brothers could turn the business around.

"We have made a commitment for a substantial sum," Cook said. "This business has a wonderful brand, it has a good dealer network and it is a good fit with what the Turners do."

The Turners - part of the family behind the Sleepyhead bedding group with an estimated fortune of $70 million - this week disclosed their plan to rescue Feltex.

They want to underwrite a third of a rescue rights issue and keep the business listed on the NZX. They are seeking other investors to put up similar sums, and are talking to several institutions and advisers.

Their bid rivals another from Australia's Godfrey Hirst, which has agreed to pay $141.8 million for the company. Under their terms, Feltex will leave the NZX and any proceeds above its $128 million borrowings will be returned to shareholders.

Feltex chairman Tim Saunders has said shareholders would get 9c to 12c a share under the Hirst proposal. This is a substantial decline on the 2004 float price of $1.70 a share and reflects Feltex's struggle to recover from a sharp downturn at the start of 2005.

Feltex shares yesterday rose 0.4c to 10.8c

The Turners reckon Feltex needs $35 million to $40 million to put it back on an even keel and have been inundated with support.

Under their plan, Feltex would issue preference shares, which would have the same rights as existing shares but would have prior ranking in a wind-up. The issue would give existing investors the opportunity to enjoy any Feltex recovery.

The Turners also say they have the support of an unnamed bank to take over the financing of Feltex should the ANZ wish to get out.

The brothers yesterday met the Feltex board to convince it to open the books to assess the viability of their bid. The board - which has agreed to make the books available to Godfrey Hirst - has yet to agree.

Feltex said last night: "We had a meeting today but there is no outcome to report."

Feltex said on Tuesday it was free to consider any other offer until shareholders voted next month on the Godfrey Hirst proposal.

Godfrey Hirst gets a $1 million break fee if Feltex accepts an alternative proposal.

Meanwhile, other shareholders are also getting behind the bid, preferring to back an offer that could salvage some of the value lost since flotation.

Philip Chisholm, a Wellington corporate adviser, has almost 1 million shares and says he will subscribe to more if the Turners proceed.

He said he was unlikely to accept the Godfrey Hirst offer, which requires the support of 75 per cent of shareholders, because he was not convinced he would get any payment.

* The Commerce Commission says it has received Godfrey Hirst's application for clearance to buy Feltex.