Carpet maker Bremworth's takeover collapses

Bremworth's proposed takeover by Floorscape has collapsed after shareholders representing 38 percent of the carpet maker's shares said they would not support the deal.

The carpet maker's board has stopped talks with Floorscape about extending the scheme of arrangement, meaning the takeover will lapse.

Bremworth chair Rob Hewett said the board was disappointed but respected the size of the opposition and would now look at alternative plans for the business.

"Thirty-eight percent of shareholders speaking is a big number, and we're certainly respectful of that," he said.

The board said the move denied Bremworth's remaining 2300-plus shareholders the chance to vote on the scheme with the benefit of all relevant information, including the independent adviser's report.

The deal was due to be completed through a scheme of arrangement, which required strong shareholder backing at a special meeting, as well as regulatory approval.

The Commerce Commission approved the proposed transaction at the end of June after several delays.

Hewett said the board had worked hard to get the scheme "over the line" and still viewed it as the best option for shareholders on a risk-adjusted basis.

He said the company had also been preparing contingency plans while it waited for the Commerce Commission's decision.

Hewett said Bremworth would engage with the shareholders who opposed the deal to understand what direction they wanted the company to take.

"We haven't had a meaningful alternative put to us yet, including business as usual," he said.

The collapse of the deal leaves Bremworth facing a difficult trading environment, with the company warning it did not expect to be profitable or cash flow positive in the second half of its 2026 financial year, which ended on 30 June.

Hewett said retail conditions had been tough in both New Zealand and Australia, and the drawn-out Commerce Commission approval process had not helped.

He said Bremworth was pushing ahead with existing plans, including the reinstated yarn plant in Napier and its move back into synthetic dyed nylon products, but clarity from shareholders on the company's direction would be useful.

Hewett said the board was now "downing tools" on the takeover and focusing on alternative plans for Bremworth.