Feltex abandoned by Godfrey Hirst

Troubled carpet-maker Feltex has been abandoned by a potential white knight, with rival Godfrey Hirst announcing yesterday that it has almost halved its stake in the New Zealand company.

Godfrey Hirst issued a substantial shareholder notice to the stock exchange, saying it had reduced its stake to 4.57 per cent from 8.72 per cent between March 14 and March 20.

The news explained an aggressive sell-off in the stock, with Feltex shares tumbling sharply in the past week to close yesterday down 12.5 per cent, or 5c, at a fresh low of 35c.

This time last year, the shares were worth $1.56.

A series of profit downgrades and a senior management rout a year after listing in June 2004 at $1.70 have left the firm in tatters.

Last month, Feltex reported a first-half loss of $11.83 million.

Privately owned Godfrey Hirst, Australia's biggest carpet-maker, emerged as a potential saviour last year and again in January when it boosted its stake from 5.78 per cent to 8.72 per cent in an onmarket stand.

But last month, Feltex said talks between the pair had been terminated.

The potential deal was not seen in the "best interests" of Feltex shareholders.

Godfrey Hirst had designs on a merger with Feltex, which would have resulted in a reverse takeover by the Australian firm and a backdoor listing.

Feltex declined to comment on yesterday's share activity.

Godfrey Hirst finance director Jim Walsh wasn't immediately available for comment.

- NZPA