Godfrey Hirst 'willing buyer' for Feltex but not under current terms

Australian Carpetmaker Godfrey Hirst has said it still wants to buy its troubled rival Feltex, but not under the terms of the current deal.

In a statement, Feltex said it expected a Turner brothers-led consortium to make an alternative offer by the end of the week, but that Godfrey Hirst had said it would not get involved in a bidding war.

"Godfrey Hirst has now advised Feltex that, in all the circumstances, it does not consider that its current proposal has a reasonable prospect of success," Feltex said.

"It has further advised Feltex that it has not formally withdrawn from the sales process and remains a willing buyer of the business, but only in an environment which is more conducive to a successful sales process.

"In those circumstances, Godfrey Hirst would then consider the terms on which it would be prepared to move forward."

Feltex said that since reporting its debt on June 30 at $128 million, interest bearing debt had risen to $135 million and it was expected to reach $143 million by the end of this month. Feltex said ANZ bank was extending its credit but monitoring its debt on a daily basis.

Hirst had offered to pay $141.8 million for Feltex's carpet making operations but its proposal contained a mechanism allowing the purchase price to be increased or decreased according to Feltex's working capital position at settlement date.

Feltex shareholders would receive a maximum of 12 cents for their shares but could get nothing.

The Sleepyhead consortium wants to inject as much as $40 million into Feltex and keep the firm listed on the NZX.

Craig and Graeme Turner, principals of the Sleepyhead group, have reconfirmed to Feltex they expected to present their full offer to the Feltex board on Friday.

ANZ met Craig Turner yesterday to seek an update on the Turner position.

Feltex's shares, which floated on the stock exchange in 2004 at $1.70 apiece, yesterday fell 1.1c to 10.1c and today fell another 17 per cent, or 0.18c to 9 cents.

- NZPA