Raphael Geminder’s $234 million bid to take full control of Pact fell short of the 90 per cent ownership he needed on Friday, resulting in the share price dropping by nine per cent in trading this week.
Geminder’s 14th and final offer to remaining shareholders expired on Friday, leaving him on 87.86 per cent, tantalisingly close to the 90 per cent he needed to be able to compulsorily acquire the remaining shares and become the sole owner. Under market rules, his investment vehicle Kin Group is not allowed to purchase any more shares for six months.
He has not yet said what his plans are now, beyond installing himself as executive chairman, adding his nominees to the board, and taking Pact off the ASX next year, which would be possible as he controls more than 75 per cent of the voting shares.
Geminder’s bid was thwarted in large part due to a long-running dispute he has been in with two businessmen over a $30 million on payment for a retail security tags and coat hanger business he bought from them five years ago.
The duo, David Harris and Mark Gandur, bought six per cent of Pact shares over the Christmas period, in what turned out to be a successful attempt to stop Geminder’s plans. Their $30 million dispute with Geminder will be heard in court next April.
Geminder, who created Pact 20 years ago by bolting together several under-performing Pratt Group companies, launched his bid for full control back in September. At that time he owned 50 per cent of Pact.
His initial 68c a share offer gained little support, but when he upped it to 84c in December three quarters of the remaining shareholders went on to sell to him. That price has now fallen back to 77c.
Pact had a share market capitalisation of $1.6 billion two years ago, but since then profits have been hit hard by skyrocketing raw materials costs.
Those costs may be about to rise further as Pact buys much of its virgin resin from what was Australia's only plastics resin producer Qenos, which is currently in administration and facing an uncertain future. Pact also needs substantial funds to develop its green transition.
