Raphael Geminder’s protracted bid to buy the whole of Pact will run until at least the beginning of March, with the offer to acquire all shares now extended.
Geminder has also issued another warning to shareholders who have not yet succumbed to his bid, essentially telling them that his offer price is the best they will get, now or in the future.
He told them they may face a decrease in share price if the bid fails, and that as the company is now delisted from the ASX they will find their shares hard to sell.
Those shareholders now include two former owners of the business that trades as Pact Retail, David Harris and Mark Gandur, who now own 5 per cent of Pact. They are in dispute with Pact over a $30m earn out payment from their former business which they sold to Pact for $122m six years ago. They have been acquiring Pact shares for the past two months.
In his eighth statement to those reluctant to sell, Geminder says that the company’s revenue and earnings are declining, and says ‘it is difficult to see how the company will return to earnings growth’.
He says that Pact’s removal from the ASX last Thursday – due to the free float of shares dipping below 15 per cent – means institutional investors would be unlikely to buy their shares at any point in the future.
He also makes clear that with only 4 per cent of the shareholding needed to reach 90 per cent, he will undertake compulsory acquisition of all shares, and he says if he doesn’t reach 90 per cent there will be a ‘heightened risk’ that Pact’s share price may fall below his 84 per cent offer.
Germinder’s Kin Group says that as the controlling shareholder it will delist Pact within 12 months, making any shares even harder to sell. Kin will make ‘substantial’ changes to the governance structure of the company. It will also continue with the suspension of dividends.
