Pact Group brings in bankers after Raphael Geminder’s takeover bid

Pact Group chairman Raphael Geminder. Picture: Stuart McEvoy

Pact Group has hired defence adviser Flagstaff Partners and law firm Herbert Smith Freehills following its takeover bid from the business interests of its major shareholder Raphael Geminder.

But the company is yet to come forward with a formal recommendation on the 68c a share, that landed last week from Mr Geminder’s Kin Group.

The offer was a 0.5c per share premium to the last traded share price and the argument is that it offers investors a liquidity event to exit in what has been a highly illiquid stock.

Pact said Kroll Australia had also been appointed to prepare an independent expert report that states whether, in the expert’s opinion, the offer is fair and reasonable.

Mr Geminder, who chairs Pact Group, owns more than 50 per cent of the business, so with control, the argument is that he does not need to offer a premium for this.

But shares in the Melbourne-based packaging company continue to trade above the $234m takeover price – on Tuesday closing at 70c or $242m.

Working for Kin Group is Macquarie Capital and law firm Ashurst.

Kin Group released a statement outlining the logic for its takeover plan, saying that Pact Group is a smaller business with a reduced earnings base.

It is facing a challenging environment, with supply chain disruptions, inflationary pressures, fluctuating resin prices, labour constraints and macroeconomic uncertainty.

It’s also fallen out of the ASX 300 and has a low level of support from institutional investors.

Kin Group is the landlord for some of Pact’s assets, and the thinking is that parts of the business remain interrelated to his private operations.