Investors reject Bremworth takeover bid as not in the industry's interests

A group of Bremworth shareholders controlling 19.4 percent of the carpet maker's voting rights has declared it will vote against a proposed takeover by Floorscape, throwing fresh doubt on a deal that has already faced months of regulatory delays.

Floorscape Limited, part of NYSE-listed Mohawk Industries and owner of Godfrey Hirst, first announced a proposed buyout in October 2025 through a scheme of arrangement.

The High Court approved the scheme in February, but the proposal later ran into competition concerns at the Commerce Commission over combining Bremworth and Godfrey Hirst under a single owner.

The Commission finally granted clearance last week, after Bremworth had spent about nine months under takeover constraints while awaiting regulatory approval.

Bremworth said it had received a letter from wool industry veteran David Ferrier, whose group - including Henry Lawford Lonsdale Ferrier, Chancery Trust and Mangawhai Collective Limited - controls 19.4 percent of the company's voting rights and intends to vote against the scheme.

With shareholders representing 19.4 percent of voting rights already declaring their opposition, the challenge of securing enough support for the scheme has increased significantly.

To succeed, 75 percent of votes cast at a shareholder meeting must support the scheme, and those votes must also represent more than 50 percent of all voting rights.

Assuming the opposing shareholders maintain their position, the scheme would need the backing of almost four out of every five remaining votes cast to succeed.

Notably, the objection is not centred on price. In his letter, Ferrier said the shareholders were not satisfied the transaction was in the long-term interests of the wool industry, its participants or customers.

The offer was originally set at between $1.05 and $1.15 a share when announced in October.

Bremworth shares closed at 89 cents on Friday.

The shareholder group said the drawn-out process had undermined Bremworth's current and future value, imposed unreasonable costs on the company, and criticised the length of time taken to secure regulatory approval.

It said the delay had "paralysed the company and its management's capacity to run the company and progress its opportunity set".

Bremworth's board rejected those criticisms, saying Ferrier's position risked disenfranchising other shareholders, particularly minority investors, before they had the opportunity to vote with the benefit of all relevant information.

The board said extensive financial modelling showed the Floorscape deal remained the best financial outcome for shareholders over a three-to-five-year timeframe.