Billionaire Geminder within striking distance of wrapping up Pact bid

Billionaire Raphael Geminder is within touching distance of acquiring packaging group Pact but the Santa rally has lifted the share price above his offer.

Billionaire Raphael Geminder and wife Fiona.

Billionaire Raphael Geminder is within striking distance of wrapping up his $289m takeover for packaging company Pact, but a Christmas sharemarket rally has pushed the share price above his offer.

Mr Geminder’s off-market takeover sits just short of the 90 per cent ownership he needs to acquire the remaining shares.

However, the recent sharemarket rally and thin trading volumes over the Christmas and New Year holiday have helped lift the Pact share price to 86.5c this week, higher than the 84c price per share offered by Mr Geminder’s private company, Bennamon Industries, part of his Kin Group.

Mr Geminder launched his takeover bid for Pact in September, offering just 68c per share and at the time he was sitting on just over 50 per cent of the company.

Later, Pact’s independent directors recommended shareholders reject the first bid after an independent expert argued the company was worth between 83c and $1.24 a share. Mr Geminder later upped his bid to 84c per share.

Raphael Geminder is close to acquiring Pact. Picture: Stuart McEvoy

At its peak in 2017, Pact shares were trading at around $7, to value the company at $2.4bn. The offer is also a long way from 10 years ago, when Pact raised about $649m based on an initial public offer of $3.80 a share.

The Pact float was the largest IPO in the Australian market in 2013 and the second-largest IPO for a packaging company completed globally.

In its fifth supplementary bidder’s statement and variation of takeover bid documents lodged with the ASX on Wednesday, Mr Geminder’s Bennamon Industries offered faster payment terms and reported it was now sitting at 85 per cent ownership of the packaging company.

It said once it gets to 90 per cent it will move to compulsorily acquire all shares from other shareholders.

Mr Geminder is also considering delisting Pact from the ASX even if he falls short of the 90 per cent barrier, however, this would require approval by the ASX and by shareholders at a meeting at which Mr Geminder could not vote his shares.

“You should be aware that if you do not accept the offer, there is a risk that the Pact share price may fall below the offer price and the levels it was trading at prior to the offer being made,” the bidder’s statement said.

“Kin Group encourages you to act now and click here to accept the offer without delay.”

Investors Mutual, Pact’s largest institutional investor with a stake of 5.54 per cent has already sold into the takeover, as has Sydney-based RealIndex Investments (3.66 per cent stake), London-based hedge fund Samson Rock Capital (2.83 per cent), Sydney based Acadian Asset Management (0.61 per cent) and all the Pact board and management team.

Pact has struggled of late, ringing up losses driven by a slowdown in activity in the sector as well as impairments including in the most recent financial results when it booked an impairment loss of $52.6m against the write down of property, plant and equipment in Australia of $48.1m and China of $4.5m.

In fiscal 2023 it reported a net loss of $6.6m on revenue of just under $2bn.

Mr Geminder has argued than given Kin’s current majority ownership, the unlikely prospect of a rival takeover offer, and given the uncertain macroeconomic outlook and operational issues it was in the best interest of all shareholders that the company was taken private.

“Kin Group considers that success for Pact is best achieved under private ownership without the additional costs, market volatility and complexities of being an ASX-listed company,” Kin said in a statement when Mr Geminder launched his takeover bid in September.

Shares in Pact closed at 86.5c.