Raphael Geminder’s protracted bid to take full control of Pact, and delist it from the ASX, has taken another twist, as his opponents have won an interim blocking order on any further share purchases.
David Harris and Mark Gandur, who have bought up six per cent of the Pact stock for around $4m in the last three months, argued to the Australian Government Takeovers Panel that Geminder’s letters to shareholders, with warnings of potential drawbacks of not accepting his offer contain “misleading” statements, may “coerce” shareholders into selling, when they would not have done without the letters, and that the email constitutes a “threat”.
They sought and won interim orders to the effect that Bennamon (Geminder’s investment vehicle) be prevented from acquiring any additional interests in Pact Group shares on market until further order of the Australian Government Takeover Panel, and that Bennamon be prevented from processing acceptances into the bid until further order of the Panel. The Panel will now give full consideration to whether the application should go forward to review, and in the meantime Geminder is prevented from buying any more shares.
The duo's application is to request that any share purchases from 12 March onwards be allowed to be withdrawn, and that all Pact Group shares acquired by Bennamon since 12 March be vested in ASIC for resale.
Harris and Gandur are former owners of coat hangers and retail security tags company Tic Group, and are in dispute with Geminder over a $30m earn out payment for their business which they sold in 2018. Their six per cent stake isn't enough on its own to block Geminder, but they have the means to lead the fight against the deal.
Geminder made his original bid to acquire the 50 per cent of Pact he did not own back in September, with a lowball 64c a share offer, which saw minimal acceptance. He upped his offer to 84c in January, which received Pact board backing, and saw his shares in Pact jump to 85 per cent. Since then though share purchases have progressed at a snail’s pace, his stake currently stands at around 87 per cent, tantalisingly close to the 90 per cent he needs to compulsorily acquire the rest of the shares.
In the latest notification though, Geminder has told the reluctant shareholders that he may delist anyway, even if he fails to achieve 100 per cent of the shares, as the board can apply to the ASX, and now he has more than 75 per cent of shares, and the board will be stacked with his nominees, he says he satisfies the conditions.
