Jobs secure in wool buyout bid

It is not the intention of Cavalier Wool Holdings to engage in any fire-sale transaction.Phil Taylor, lawyerWool Services International (WSI) employees in Whakatu will keep their jobs under the current $40 million offer from Cavalier Wool Holdings to buy its business, assets and liabilities.
Cavalier's lawyer, Bell Gully partner Phil Taylor, made the statement in a letter to the Commerce Commission after it asked Cavalier about its intentions for the wool-trading arm of WSI.
Cavalier needed Commerce Commission approval to purchase WSI because it would give it a virtual monopoly in the wool-scouring industry.
Cavalier's $40 million offer had pre-empted the commission's decision.
"The CWH offer specifically offers employment within the CWH Group to all employees of WSI (including wool-trading employees)," Mr Taylor's letter said.
"To the extent that any members of the WSI wool-trading management team do not wish to take up that offer of employment (which would be very disappointing and surprising to CWH), CWH will reluctantly have to resort to the pool of available very experienced and senior wool traders that would be available to step in to the business at short notice."
Mr Taylor's letter said Cavalier was in talks with potential buyers of WSI's wool-trading arm.
"The current CWH offer price places a full value on both the wool-scouring and wool-trading businesses as going concerns.
"In respect of the WSI wool-trading business, it is the intention of CWH to on-sell that business for the best price it can achieve as soon as practicable.
"Having said that, it is not the intention of CWH to engage in any fire-sale transaction, rather it is incentivised to obtain the best value for the business. CWH already has interest from multiple parties wishing to negotiate an acquisition of the wool-trading business and has commenced preliminary discussions with some of them."
He said Cavalier had the necessary funding to acquire the overall WSI business and to carry on the wool-trading operation for as long as was necessary.
Cavalier applied for clearance from the commission after it was announced a combined two-thirds stake in WSI was on the market following the receivership of two Allan Hubbard-related companies - Plum Duff and Woolpak.
WSI was not taking the offer seriously until the commission had made its decision. Cavalier has indicated WSI's scouring plants from Kaputone, north of Christchurch, would move to Timaru.
The Whakatu operation would move to Cavalier's plant at Awatoto. Cavalier planned to mothball scour lines at its own Clive and Timaru plants.