4:20PM MARCH 17, 2024Raphael Geminder’s hopes of neatly...

4:20PM MARCH 17, 2024

Raphael Geminder’s hopes of neatly wrapping up his $289m takeover of his packaging empire Pact Group were dealt a blow as two aggrieved former business partners locked in a separate legal dispute with Mr Geminder appealed to the Takeovers Panel claiming he had misled Pact shareholders and coerced them into selling their stock into the bid.

Mr Geminder has been accused of issuing misleading and confusing statements to shareholders in Pact Group who have so far resisted his 84c per share bid, with allegations that the billionaire’s warning that Pact was about to be delisted from the ASX - leaving holdout shareholders stranded in an unlisted stock - potentially unduly coercing some into selling into the takeover.

The launch of the action in the Takeovers Panel late Friday by David Harris and Mark Gandur, who have also built a potential blocking stake of 6 per cent in Pact, comes at a critical time for Mr Geminder, who launched his takeover bid in September and quickly raced to 86.85 per cent but now looks to have frozen just short of the finish line.

In a tantalising corporate play on the idea that revenge is a dish best served cold, Mr Harris and Mr Gandur are currently locked in a legal battle over a $30m earn out payment they believe Mr Geminder’s Pact owes them from when they sold their coat hangers and security tags business to the billionaire in 2018.

That dispute was detailed in Pact’s annual report with the battle being waged in the Commercial Court of the Supreme Court of Victoria. But now across town in the Takeovers Panel a new front has opened up as Mr Harris and Mr Gandur try to slow or stop Mr Geminder privatising his packaging business and rally minority shareholders to fend off the takeover offer.

They argue Mr Geminder’s private company Kin Group emailed remaining Pact shareholders on March 12 with the subject line “KIN GROUP PLANS TO DELIST PACT GROUP”.

The email contained a number of misleading statements, by way of both commission and omission, and might have coerced shareholders into selling their stock to Kin, the business partners have claimed.

“The misleading and/or confusing nature of the 12 March 2024 email has coerced and may coerce shareholders who would not have otherwise accepted the bid to accept. As a result of the misleading and/or confusing nature of the 12 March 2024 email, the email constitutes a threat of an imminent delisting to coerce shareholders into disposing of their shares contrary to the purpose set out in section 602(a) of the Corporations Act 2001 (Cth),” a Friday statement from the Takeovers Panel said.

They have asked for interim orders from the Takeovers Panel to prevent Mr Geminder’s company from acquiring additional shares in Pact and processing acceptances into the bid until further order of the panel.

The applicants are also seeking final orders that any shareholder that accepted into the bid from March 12 be allowed to withdraw their acceptance and that all Pact shares acquired by Mr Geminder on market during the relevant period be vested in ASIC for resale.

When Mr Geminder kicked off his takeover bid in September, which first started at 68c but then under pressure from Pact’s independent directors was lifted to 84c, he had just over 50 per cent of the company. He rapidly raced to 86 per cent as investors, including the board and institutional shareholders, happily sold out of Pact, which had underperformed for years and saw its share price crash from a high of just under $7 in 2017 to as low as 54c more recently.

The aggrieved business partners Mr Harris and Mr Gandur who run TIC Group, a logistics and supply chain company, thrust themselves into the Pact takeover in late January, scooping up a 5 per cent stake and then in February lifting it to 6 per cent.

While their 6 per cent stake is not enough to stop a compulsory acquisition of minorities by Mr Geminder if he reaches 90 per cent, it could help slow him down or even derail the bid completely if other smaller shareholders decide to also sit on their hands.

Mr Geminder’s route to compulsory acquisition is also being slowed by Pact shares mostly trading above his 84c per share takeover bid.

A spokesman for Mr Geminder declined to comment on the Takeovers Panel issue.


Source: The Australian