Pact Group directors reject top shareholder’s buyout bid

The news: Independent directors of Pact Group have rejected an offer by billionaire shareholder Ralph Geminder to buy out the remaining shares of the troubled packaging manufacturer and take it private.

The numbers: Geminder’s Kin Group, which owns a 50% stake in ASX-listed Pact, last month offered 68 cents a share in an off-market takeover offer for the remaining stake. The stock closed at 72 cents on Thursday, but is still down 45% over the last 12 months.

The context: An independent board committee urged shareholders to reject the deal after an independent expert review concluded the offer was “neither fair nor reasonable”. The review valued Pact’s shares at between $1.06 and $1.51 each and called the bid “opportunistic”. The company, which reported a full year loss in August, has suffered from softening demand for packaging from key customers amid tougher economic conditions. Kin Group, whose investments include discount retailer The Reject Shop and Pro-Pac Packaging, had argued Pact could best achieve success without the additional costs, market volatility and complexities of being an ASX-listed company.