The board of Pact Group has told shareholders that Raphael Geminder’s takeover offer through Kin Group is too low, and advised them to reject the proposed deal.
Kin, which already owns 50.2 per cent of Pact, has offered 68c a share, but an independent expert hired by the directors, Kroll Australia, says the shares are worth between $1.06 and $1.51. The board has told shareholders that the offer made by Kin is “neither fair nor reasonable”.
In the letter to shareholders Pact director Michael Wachtel, who is a member of the independent board formed to deal with the unsolicited offer, labelled the move “opportunistic”, and said Kin was trying to gain full control of Pact “without paying a customary premium".
Wachtel also said the offer does not take into account Pact’s transformation strategy, with its $20m in cost reductions, nor its pending divestment of half its crate pooling and crate manufacturing business, which will reduce its leverage by $160m.
Geminder wants to take Pact off the ASX. It listed a decade ago, when its shares were trading for $3.80, more than five times the current value. The offer by Geminder, who is worth $1.3bn according to the Financial Review Rich List, values the company at $234m.
