Slow going for Rich Lister Geminder in Pact buyout

Rich Lister Raphael Geminder’s buyout bid for packaging company Pact Group has struggled to make headway, with his Kin Group entity only reaching 51.53 per cent of the target with 24 hours to go on the original offer.

Kin Group held 50.004 per cent at the start of the buyout offer launched in mid-September.

Mr Geminder, who attended the Melbourne Cup at Flemington on Tuesday, has faced strident opposition to the bid from the two independent directors on the Pact board.

An independent board committee, led by director Michael Wachtel, on October 13 told the remaining shareholders to reject the 68¢-a-share offer made by Mr Geminder because it was “neither fair nor reasonable”.


Mr Wachtel is up for re-election at the Pact Group annual meeting scheduled for November 16.

Mr Geminder’s Kin Group in mid-September launched the 68¢-a-share bid at a time when the stock was trading at 67.5¢ each. The shares closed on Tuesday at 71.5¢ and have traded above the bid price the entire time.

An independent expert report by Kroll Australia valued Pact shares at between $1.06 and $1.51. But Kin Group was frustrated the Kroll report valued the business on a hypothetical scenario of an offshore packaging company being able to acquire 100 per cent of Pact, given it already had more than 50 per cent of the company at the start of the bid.

The target’s statement and independent expert report did outline in fine print that a valuation range of 83¢ to $1.24 per share was appropriate for the minority stake owned by non-Kin shareholders, when a control premium was excluded.

Mr Geminder’s Kin Group has investments across retail, packaging and property, including a 20 per cent stake in discount retailer The Reject Shop, 66 per cent of Pro-Pac Packaging, and a 4.5 per cent stake in skincare and make-up distributor McPhersons.

Pact’s origins date back to 2002 after Mr Geminder engineered the management buyout of several underperforming assets from the billionaire Pratt family’s Visy Industries.


Source: AFR