Pact Group settles bitter legal dispute, paving way for privatisation
Pact Group has settled a bitter court feud for $9.9m, paving the way for its privatisation, and sparing billionaire Raphael Geminder from being cross-examined in court.
Billionaire Raphael Geminder’s Pact Group has agreed to pay Melbourne businessmen David Harris and Mark Gandur $9.9m to settle a bitter court fight as part of an almost $20m package deal that will lead to Pact being privatised within six months.
It is less than the $30m earn-out fee Mr Harris and Mr Gandur hoped to get out of the legal dispute, which they claimed to be owed after Mr Geminder’s Pact Group acquired their coat hanger business, TIC in 2018.
“The legal proceedings which commenced in 2021 in the Supreme Court of Victoria relating to the acquisition of TIC Retail Accessories have been settled under a deed of settlement dated 10 December 2025,” the statement read.
“Under the deed, the company will pay the sum of $9,990,000 to the defendants (the former owners of the TIC Retail Accessories Group).
“The board considers that this settlement is in the best interest of the company and will enable the company to remain focused on its business performance.”
The settlement was reached just before Mr Geminder was due to be cross-examined in court on Wednesday, and after both parties opened their cases in what was slated to be a three week trial.
Mr Geminder is married to Fiona Geminder, daughter of the late Richard Pratt, and worth about $1.09bn according to The Australian’s Richest 250.
It has also paved the way for Mr Geminder to privatise Pact Group — a packaging and recycling business that was floated on the ASX in late 2013 — after Mr Harris and Mr Gandur held out accepting a takeover offer from Mr Geminder’s Kin Group last year with their 6 per cent voting power.
Kin purchased 2.56 per cent of the target from Mr Harris and Mr Gandur, taking Kin’s shareholding to 91.1 per cent.
Kin Group also announced an offer to buy Pact shares at $1.10 per share, meaning Mr Harris and Mr Gandur could have received about $9.6m for the 2.56 per cent parcel they agreed to trade.
“Kin has informed the company that, under a share purchase agreement dated 10 December 2025, its subsidiary, Bennamon Industries Pty Ltd, has purchased 8,800,000 shares in the company from entities associated with the former owners of the TIC Retail Accessories Group (representing approximately 2.56 per cent of issued shares),” the investor update read.
“This increases Kin’s voting power in the company to approximately 91.1 per cent and Kin is now entitled under the Corporations Act 2001 (Cth) to compulsorily acquire the shares in Pact it does not own. Kin has six months to exercise this right.”
Last year, Mr Harris and Mr Gandur effectively scuppered a Kin takeover by holding out on accepting the 84c-per-share bid. Other shareholders also held out. Some sought a higher bid price, others wanted to hold the stock due to the environmental values of the company.
Pact Group delisted from the ASX in last July. The company acquired TIC from Mr Harris and Mr Gandur in August 2018 for $60m cash, paid in three tranches.
They also received $62m worth of Pact shares. On August 31 2018, Pact shares were worth $4.12 per share.
On Monday during their opening arguments, Pact’s lawyers told the court TIC’s $30m earn-out could be triggered if the acquisition hit earning before interest, tax, depreciation and amortisation worth $19,400,000 for the fiscal year to June 30, 2019 or June 30, 2020.
But the court heard TIC’s EBITDA was about $10.8m in the 2019 financial year, and about $12.3m in the 2020 financial year. Following adjustments agreed to by Pact, the court heard the 2020 EBITDA was revised up to $17.6m, but still fell short of the trigger.
“One can infer from the earn out threshold, that was a figure the parties considered reasonable performance,” the court heard. “We say the reason no earn out was forthcoming was because the business did not perform anywhere near expectations of buyers or sellers.”
TIC alleged Pact tried to block their earn-out, and accused the company of deferring about $8m of orders made in June 2020 to the following financial year.
Mr Geminder’s lawyers rejected that allegation, saying “that conduct did not occur” and there was “no strategy to defer revenue”.
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Originally published as Pact Group settles bitter legal dispute, paving way for privatisation
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