When I really think about it the most logical merger would be CKL and PPG!
PGH is a great plastics packaging business. I do not believe throwing in other forms of packaging would benefit its model.
Hence the strategy could well be;
PPG merge with CKL. PPG can then become the distribution arm of CKL and be able to go to customers with a whole of packaging solution. PPG's rigid plastics business is a dog and the best solution would be to close it down and get PGH to manufacture on behalf of PPG making PPG a pure distribution player on the rigid's side.
PPG has more in common with CKL than does PGH!
Without checking the details Ruffy Owns 47.64% of PPG personally its not PGH that owns PPG. and Ruffy also owns 16.09% of CKL personally once again not through PGH.
Keeping in mind PPG and CKL do not compete with PGH so Ruffy holding these investments personally is not a conflict, however if PGH was to acquire any of these businesses it may well be considered a conflict.
My view combining PPG and CKL will increase the critical mass of the business and re-rate the total enterprise.
CKL Price at posting:
53.0¢ Sentiment: None Disclosure: Not Held
