Godfrey Hirst granted leave for narrow appeal on wool scouring merger
The merger has been stayed pending the appeal by Godfrey Hirst.
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Hawke’s Bay
Australian-owned carpet maker Godfrey Hirst has been given a small window to appeal a High Court ruling as it continues efforts to stop New Zealand's largest wool scouring operations from merging.
In the High Court in Auckland, Justice Murray Gilbert let Godfrey Hirst pursue its bid to overturn regulatory approval letting Cavalier Wool Holdings [NZX: CAV] buy New Zealand Wool Services International's wool scouring business and assets, a July 15 judgment released today shows. The Australian carpet maker has to limit its argument to whether the earlier ruling was mistaken in agreeing with the Commerce Commission's treatment of productivity gains flowing to foreign shareholders.
"This is a discrete issue of considerable public importance. It has not been ruled on by the Court of Appeal," Justice Gilbert said. "Given the significance of the issue in the present case, where at least 45% of the gains will flow to a foreign shareholder, I consider that leave should be granted to enable the Court of Appeal to consider it."
The merger has been stayed pending the appeal by Godfrey Hirst, a rival of New Zealand-owned carpet-maker Cavalier Corp which is one of the three shareholders in CWH.
The transaction was allowed because while the commission found it would give the wool scourer a monopoly on the supply of wool scouring services and the supply of wool grease and be able to raise its prices, there was a broader public benefit in fending off competition from cheaper foreign rivals.
(BusinessDesk)
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Paul McBeth
Fri, 22 Jul 2016
Fri, 22 Jul 2016
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Godfrey Hirst granted leave for narrow appeal on wool scouring merger
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