Godfrey Hirst cleared to buy Feltex

Australia's Godfrey Hirst was today cleared by the Commerce Commission to buy troubled carpet maker Feltex Carpets.

Commission chair Paula Rebstock said that the commission was satisfied the proposed acquisition would not, or would not be likely to substantially reduce competition in any of the relevant markets.

This month Feltex agreed to a rescue bid by Hirst whereby the Australian company would buy Feltex for $141.8 million and pay shareholders a maximum of 12c a share.

However, Sleepyhead principals, Graeme and Craig Turner, have also been granted permission to check Feltex's books with a view to putting up a superior offer.

Despite granting permission to the Turner brothers, Feltex has continued to support the deal agreed with Hirst on August 1 in the absence of an actual superior offer.

Meanwhile, Green Party MP Sue Bradford said in Parliament yesterday that merchant bankers had ripped off Feltex shareholders and a Securities Commission inquiry had been unsatisfactory.

Ms Bradford said thousands of New Zealanders lost a significant amount of money, the jobs of hundreds of workers had been put at risk and an iconic manufacturer was threatened.

"Why are we all pretending that the $200 million ripped off New Zealand shareholders and workers by Credit Suisse First Boston Asian Merchant Partners didn't happen?" she said during the general debate.

"Two hundred million dollars is the figure that a number of reputable business journalists have calculated has been expropriated from Feltex before, during, and after its 2004 initial public offering."

Ms Bradford said Credit Suisse First Boston, based in the United States, bought Feltex for $19.5 million in 1997 and created 120 million shares which it floated at between $1.70.

They were now trading for only 10 cents to 12 cents, and company is worth less than $15 million.

"So around $200 million has disappeared, expropriated from mum and dad and institutional shareholders and Feltex workers," she said.

Ms Bradford told Parliament she wrote to the Securities Commission on August 9 asking for an inquiry.

On August 25 the commission said it found no breaches of securities laws and that no further action would be taken.

"What a whitewash," she said.

"I know shareholders are determined to seek redress for this ripoff. We in this House should do what we can to help them."

Ms Bradford later issued a statement saying the Securities Commission's decision to take no further action was bizarre.

- NZPA