Minority shareholders in Pact Group have written to the Australian Takeovers Panel asking it to stop the company’s proposed delisting from the ASX, which the company wants to action on 16 July.
Jeremy Raper, Jeremy Machet and Scrap Invest have asked the Panel to put a stay on the company’s EGM, until the Panel makes a determination on the proposal, which the applicants request be blocked.
A sitting Panel has not been appointed at this stage and no decision has been made whether to conduct proceedings.
The Pact EGM, scheduled for 12 June, will vote on the proposed delisting. With Raphael Geminder owning 88 per cent of the shares in the company, and being the person behind the move to delist from the ASX, the vote will be a shoo-in.
Raper told the Takeover Panel that he wanted the move stopped because he claimed the reasons disclosed for the proposed delisting are false and misleading; he also said the board is not acting in the best interests of shareholders in endorsing the proposed delisting, and claimed the proposed delisting has a substantial coercive effect upon minority shareholders.
In a separate application to the Panel, Jeremy Machet and Scrap Invest said the low liquidity of PGH shares and the short window to sell before the shares are suspended from quotation on 14 July 2025, pressures shareholders to sell at depressed prices or hold illiquid unlisted shares.
That objection also claimed that the notice of meeting for EGM may lack balanced information and allows the major shareholder to exercise its 88 per cent holding to vote for the delisting, while also being in a beneficial position to acquire additional shares.
The Machet and Scrap Invest objection also said PGH continues to frame the company’s position negatively, for example citing a concentrated share register and listing costs, while downplaying positive developments, for example revenue normalisation in Q3 FY25, ongoing debt refinancing and potential divestments, and said this selective disclosure may mislead shareholders about PGH’s fair value and prospects, influencing their decision on the delisting.
The applicant submits that these circumstances are unacceptable because they affect the control of PGH by facilitating the major shareholder’s consolidation of ownership in a way that contravenes the purposes of Chapter 6 of the Corporations Act 2001, and claimed they undermine an efficient, competitive, and informed market.
Geminder, whose net worth is estimated at $1.58bn, launched a $234m bid to increase his 50 per cent stake in Pact Group to total control 18 months ago. But, despite extending and upping the bid 13 times, he failed to get his bid across the necessary 90 per cent shareholding line, falling just short in reaching 87.9 per cent. During the latter stages of the bidding process he made it clear to minority shareholders that he would look to delist if the bid failed, and that such a move may limit their options.
The Pact Board said the reasons for the delist proposal are low liquidity in the stock, the low level of trading, and the costs of maintaining an ASX listing, as well as the burden of compliance for an ASX listing, and the amount of time the board has to use for ASX matters.
The ASX has given advice that it will agree to Pact Group’s removal from the ASX, subject to its usual conditions. Pact has said minority shareholders will be able to sell their shares on the ASX prior to 16 July should they choose to do so.
If Pact has more than 100 shareholders when it has delisted it will have to give continuous disclosure to ASIC, and lodge annual and half yearly results with ASIC, if it has less than 100 shareholders then those obligations no longer apply.
