Godfrey Hirst snares stake in rival Feltex

Australian carpet company Godfrey Hirst has taken advantage of rival Feltex Carpet's woes to snare a 5.78 per cent stake in the New Zealand company.

The unlisted rival revealed the stake when it issued a substantial security holder notice early this afternoon.

Brokerage UBS New Zealand this morning announced it was standing in the market on behalf of an unnamed investor for 10 per cent of Feltex at 58c per share.

Brokers had guessed the buyer was Godfrey Hurst.

By noon however, Feltex shares had climbed in busy trade to 60c, 2c above the stand offer, and 9c above yesterday's closing price.

Godfrey Hirst executives would not return calls today.

First NZ Capital broker Malcolm Davie said Godfrey Hirst was likely to see a chance "to consolidate a fairly fractious industry structure".

There were 1.4 million shares, 1 per cent of the company, traded on market.

Corporate raider Guinness Peat Group has also been rumoured to be sniffing around Feltex.

Feltex shares have dived since releasing two profit warnings in the current quarter.

They took a severe hammering last week after the company said its net profit for the June year would likely be about half of the $23.9 million projected in its listing prospectus. The company also announced the premature departure of chief executive Sam Magill.

The shares plunged as low as 39c on the news against a listing price of $1.70 in June last year.

Institutional brokers were active traders last week.

Goldman Sachs JB Were picked up 1.5 million shares at 46.5c per share after the market closed on Thursday and UBS today bought 5 million shares at 44c and 715,000 shares at 47c in two separate transactions on Friday.

GPG director Tony Gibbs on Friday declined to comment on whether the company has its eye on Feltex. He said he was aware of the rumours but the company had a policy of not confirming or denying its intentions.

- NZPA