Raphael Geminder accuses McPherson’s of insulting shareholders

The billionaire packaging and retail mogul is urging McPherson’s shareholders to support his $177m bid for the company.

Raphael Geminder. McPherson’s says his takeover offer is ‘materially inadequate’. Picture: Stuart McEvoy

The battle for the future of 150-year-old company McPherson’s has erupted into a war of words, with the company’s board urging shareholders to reject Raphael Geminder’s $177m “utterly opportunistic” takeover offer, while the billionaire chairman of packaging giant Pact Group accused the company of “disrespecting shareholders.”

In a 48-page statement released to the market on Thursday, McPherson’s, which owns a stable of health and wellness brands including Dr LeWinn’s, Lady Jayne, Glam by Manicare and Swisspers, urged shareholders to also reject the $1.34 per share offer from Gallin, a subsidiary of Mr Geminder’s family vehicle Kin Group.

The share-on-market offer is set to close on May 10, but may be extended.

Company chairman Graham Cubbin told shareholders that the board felt the bid was opportunistic because it came at a time of share price weakness due to challenging operating conditions, particularly for its China-orientated Dr LeWinn’s skincare brand.

“The offer has been opportunistically timed to exploit McPherson’s recent share price weakness following a period of challenging trading conditions,” Mr Cubbin said, adding that the price neglected to factor in long-term growth prospects and shareholders should at least wait for the completion of an operational review before forming an opinion.

“The McPherson’s board view is that the offer does not reflect the long-term value of your McPherson’s shares and that Gallin is implementing a hostile takeover strategy to achieve control or partial control of the company without paying McPherson’s shareholders a fair premium for control.

“The Directors recommend that shareholders await the finding of McPherson’s operational review in May 2021 to ensure they have a full picture of the company’s strategy to deliver growth.”

Mr Geminder, who is married to Fiona Geminder, the daughter of late billionaire industrialist Richard Pratt, controls his own private investment empire spanning food packaging and retail and was recently estimated by The List to be worth $1.18bn in his own right.

He is also the brother-in-law of billionaire investor Alex Waislitz, who was once a director of McPherson’s and its biggest shareholder.

Gallin director Nick Perkins returned fire at the McPherson’s board later on Thursday, accusing Mr Cubbin and newly appointed board-member-turned-CEO Grant Peck of being unable “to turn around the company”.

“The Target’s statement is utterly underwhelming and uninformative – it contains no new information or tangible plans and reinforces that this is a company that has lost its way,” he said.

“The longstanding chairman, and the recent internal appointment of the CEO, is likely to entrench the Company’s substandard performance.

“The Target’s statement provides no hope to shareholders of a credible path forward.”

Mr Perkins accused the board of lacking transparency as it has not issued a trading update in months, and said the operational review was “cynically timed” as it was announced publicly shortly after Gallin’s offer was made despite reportedly being in the works for “some months”.

“Conveniently the review is not expected to complete until an unspecified date in May, presumably after the current end date of Gallin’s Offer,” Mr Perkins said.

“This unspecified date also appears to be the earliest that shareholders can expect to receive a trading update.

“This is extraordinary in the context of a takeover offer and is an insult to shareholders.”

Mr Cubbin soon issued a response, accusing Gallin of being the one disrespecting shareholders.

“This is the response you would expect from a hostile party attempting to pick up the company on the cheap,” he said.

“Gallin and Mr Geminder have made no effort to make contact with the board about their offer or views on the company.

“They have instead put forward a lowball offer and chosen to throw stones from afar, which is disrespectful to shareholders.”

Some major shareholders have voiced opposition to the offer price. Founder and CIO of Microequities Asset Management Carlos Gil, who holds a 7.6 per cent stake in the company, said the price was “unfair”.

“We feel that the offer is unfair to shareholders and very shallow and is therefore overall unattractive and not really worth considering,” he said.

“We do welcome their interest in the company, but unfortunately the price is very far from being fair and reasonable.”

But Investors Mutual Limited founder and investment director Anton Tagliaferro, who holds 4.48 per cent of McPherson’s, said he hoped the bid would lead to a change in management.

“It’s a bit early to tell in terms of value, but the company has been performing poorly for the last couple of years and certainly needs a shake up,” he said.

We are hopeful that the bid on the table will lead to either a change of management or change of control that will see the company’s fortune improve.

“We are looking forward to hearing what McPherson’s plans are given they believe the current offer undervalues the company – but certainly we are happy that Gallin has bid because we believe urgent action is required to get the company back on track.”

McPherson’s shares closed at $1.435, up 1.41 per cent.