Raphael Geminder’s improved offer price through his Kin Group to Pact shareholders has seen his stake surge to 85 per cent, and he is now on track to gain full control of the business.
Geminder has warned the remaining shareholders that if they do not accept his terms, and Kin - which is owned by Geminder and his wife Fiona, daughter of the late 'cardboard king' Richard Pratt - gets to 90 per cent ownership of Pact, he will instigate compulsory ownership of the remaining shares, at the market price, which may be lower than the 84c he is offering.
The original 68c a share offer received little support, but since the increased offer was made acceptances have been rolling in, including from the second biggest shareholder, Investors Mutual. The Pact Board recommended acceptance of the new offer, and all members have sold their shares.
Geminder has also been promising quick payments, five business days, as a further incentive in his bid for the company.
If Kin does win full control Geminder will take the business off the ASX immediately, returning it to private hands. Geminder originally established Pact two decades ago, after buying several ailing Visy businesses and putting them together. He listed Pact in 2013, raising some $649m at $3.80 a share. Its stock reached a peak in 2017, hitting $7, but, save for a spike two years ago, has been trading down ever since, reaching a low of 57c in June this year. It is currently priced at 90c.
Revenue for Pact for the 12 months to June was up by six per cent to $1.95bn, but underlying net profit fell by 40 per cent to $45m, with a statutory loss of $7m posted.
The new offer values Pact at $289m, little more than half of the $480m of two years ago.
Geminder, worth $1.3bn according to the AFR Rich List, also owns two-thirds of Pro-Pac Packaging.
