Australian merino wool specialist Lempriere may have to bide its time to mop up the remaining 25% of shares in New Zealand Wool Services International it has not yet locked up.
Its present 75% lock-up offer of $23.2 million, at 45c per share, values Wool Services at $31 million and the outstanding 25% stake is valued at $7.8 million.
While some New Zealand woolgrowers are expected to be disappointed in the Australian takeover, the fact top management also signed a separate lock-up deal for their combined 11% stake, worth $3.41 million, signals management faith in Lempriere.
In the wake of Chinese whiteware giant Haier making a takeover play for Fisher and Paykel Appliances, the Wool Services takeover is yet another company destined for foreign ownership and delisting from the New Zealand stock exchange.
Typically in a takeover bid, the remaining minority shareholder bloc holds out for a better offer, backed by an independent appraisal.
Craigs Investment Partners broker Peter McIntyre noted the last trade in Wool Services was at 37c, it has a historically low daily trading volume and no-one had been "snapping up shares" since the lock-up announcement on Wednesday.
"Shareholders will be waiting for the independent appraisal.
At present, it is only speculation that a higher offer could appear," he said.
Given a historical high of 74c a share, a low of 12c and 2011 high of 60c, Mr McIntyre regarded the 45c offer as "reasonable".
Wool Services chairman Derek Kirk said if shareholders decided the offer was acceptable, it would bring to an end "huge uncertainty" for staff and shareholders alike, because of a plan by Cavalier Wool to take over the company and form a monopoly.
Wool Services' annual turnover is about $200 million. It handles about 250,000 bales annually of scoured strong wool, destined for the carpet market, with an average bale price of $800.
Mr Kirk said a lot of effort was put into giving some New Zealand woolgrowers the opportunity to buy the 64% outstanding stake in Wool Services, but from the receiver's perspective, the safer bet was a lock-up and sale agreement with Lempriere.
New Zealand Wool Services
1991: Formed. Wholly owned subsidiary of New Zealand Wool Board.
1996: New Zealand Wool Board distributed all its shares to Wool Services' almost 14,000 wool growers.
Late 1997: Wool Services issued 40 million new ordinary shares at 25c each, including about half to existing shareholders and employees.
May 2004: Listed on the NZAX sharemarket.
April 2007: Acquired Kaputone Wool Scour Ltd and Whakatu Wool Scour Ltd, plus wool-trading business of Raymond Dale Wool Marketing Ltd.
September 2012: 75% stake locked up in 100% takeover bid by Melbourne-based Lempriere. Total ownership valued at $31 million.
Has wool scour plants in Christchurch, 85% ownership, and Hastings 50%.
Lempriere Holdings
A 150-year-old family-owned wool merchant and processor, based in Melbourne.
Owns specialist merino merchant The Merino Co with businesses in the United States, Argentina and South Africa. A major supplier of fine wool to European, Japanese and American fashion houses.
