Bremworth board ‘disappointed’ as another shareholder opposes sale to US buyer

Monday, 6 July 2026

The number of shareholders in carpetmaker Bremworth opposed to its sale to a US company has grown again.

On Monday at 8.30am, the board of wool carpetmaker Bremworth issued a statement on the NZX sharemarket saying it was disappointed a group of major shareholders had vowed to vote against a “scheme of arrangement” that would see it taken over by a US company.

But just an hour and a half later, the board updated the market again, saying another shareholder had come out in opposition to the scheme.

Last week, the Commerce Commission gave permission for the scheme of arrangement for the troubled carpetmaker to be put to shareholder vote.

US conglomerate Mohawk Industries, which is the ultimate parent of Bremworth’s biggest local carpet rival Godfrey Hirst New Zealand, would merge Bremworth with Godfrey Hirst, if the scheme of arrangement was put into effect, giving it the lion’s share of the wool carpet market.

However, the commission said 85% of carpets sold are synthetic, so the acquisition by Mohawk would be unlikely to constitute a substantial lessening of competition in the wider soft flooring market.

But on Saturday it emerged that a group of shareholders headed by David Ferrier controlling nearly 20% of Bremworth’s shares was preparing to vote against the scheme.

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The shareholders, which are associated with the Ferrier family, hold 19.4% of Bremworth shares.

And while that falls short of the amount needed to guarantee the takeover plan will be voted down, but is a huge hurdle for the board to get over.

The vote to approve the scheme of arrangement would need 50% of shareholders to vote, and 75% of those voting to vote in favour of the scheme.

“It is now very unlikely that the SIA (scheme implementation agreement) will attract sufficient votes to pass the required shareholder voting threshold,” Ferrier said in his letter to shareholders.

The scheme implementation agreement must be extended, as the next step of the process the board must follow.

The hurdle has now got higher still, after the board made a second announcement on the NZX at 9.59am on Monday saying it had been informed that Terry Harrison, as trustee for the TR Harrison Securities Trust, purporting to represent holdings of approximately 2.4% of the shares in Bremworth, had indicated those shareholders intended to vote against the proposed scheme of arrangement.

In its 8.30am statement to shareholders released to the NZX on Monday, the Bremworth board said it was “disappointed that Mr Ferrier has chosen to express his opposition to the scheme before shareholders (including Mr Ferrier) have been provided with all information regarding the merits of the scheme, and the prospects of Bremworth, if the scheme does not proceed”.

The scheme booklet and independent adviser’s report were being finalised for distribution to shareholders, subject to the extension to the end date under the scheme implementation agreement, the board said.

“Mr Ferrier's current position risks disenfranchising other shareholders, including minority shareholders, of the opportunity to vote on the scheme with the benefit of all information,” the board said.

“The board's offer to engage further with Mr Ferrier has been rejected,” the statement read.

The board continued to argue that modelling had indicated the scheme of arrangement provided the best likely return for shareholders.

“The outcome of this work has consistently been that, on a risk and time-value adjusted basis over a three-to-five-year timeframe, no reasonable operating scenario (or alternative proposal) came close to delivering the value to shareholders that the transaction with Floorscape offers,” it said.

Floorscape, which is owned by Mohawk, owns Godfrey Hirst.

One thing Ferrier and the board agree on is that the Commerce Commission took far too long to make a decision on whether the scheme of arrangement would damage competition in the flooring market.

The initial application was made in October last year.

Ferrier criticised the Commerce Commission for the “inordinate” amount of time it had taken to consider the application for the scheme of arrangement.

The statement from the board said: “As previously advised, the delays in the New Zealand Commerce Commission's decision date meant that an extension to the end date under the SIA was required. Bremworth continues to engage with Floorscape on extending the SIA and will update shareholders once discussions with Floorscape have concluded.”

Bremworth was founded in Papatoetoe in 1959 and for many years traded strongly on the NZX. However, it declined as it battled to compete with an increasingly open market for synthetic carpet imports.

Shareholders grew frustrated in 2025 at a decline in profits at Bremworth, and advocated for change, which culminated in the takeover bid by Mohawk.