The Wellington High Court has dismissed an appeal by the country’s biggest carpet manufacturer, Godfrey Hirst, to stop Cavalier Wool Holdings buying rival wool scourer, NZ Wool Services International.

This opens the door for Cavalier Wool Holdings, jointly owned by Cavalier Carpets, the Accident Compensation Corp and private equity investor Direct Capital Investments, to buy WSI  for a price of $40 million, and create a wool scouring monopoly.

But that move is being challenged with the arrival of a rival bidder, Wool Equities, who are currently trying to raise $40 million of capital to merge the two companies.

And last week Wool Services International, which is strongly against Cavalier’s bid, announced it was planning to raise fresh capital once the High Court ruling was made.

WSI says Cavalier’s claims that a wool scouring monopoly would be the saviour of the New Zealand wool industry were 'mischievous and misleading'.