Takeover target Pact cuts 175 jobs, pursues asset sales
Takeover target Pact Group has axed 175 jobs, put a Victorian business up for sale and is weighing up whether to proceed with a renewed attempt at selling its entire contract manufacturing business valued at close to $130 million.
The company’s second-largest shareholder, IML, continues to be scathing about the price of a buyout offer pitched by its major backer, Rich Lister Raphael Geminder, whose Kin Group in mid-September launched a 68¢-a-share bid at a time when the stock was trading at 67.5¢.
Kin Group is making slow progress gaining acceptances and its latest filing to the ASX showed that at October 18, it owned 50.22 per cent of Pact, compared with 50.02 per cent at the start of the offer.
Rich Lister Raphael Geminder launched a buyout offer for the rest of Pact Group in mid-September. Josh Robenstone
IML holds about 6 per cent of Pact. Portfolio manager Simon Conn said the very slow rate of acceptances of the Kin Group bid reflected the large gulf between the $1.06 to $1.51 range at which independent expert Kroll Australia valued the shares, and the offer price of 68¢. The shares closed on Friday at 72.5¢.
“There’s a big gap and I can’t see why shareholders would accept,” Mr Conn said.
Mr Conn also said a $20 million cost-cutting program at Pact had not been fully factored in by the market.
An independent board committee, led by director Michael Wachtel, on October 13 told the remaining shareholders to reject the 68¢ a share offer made by Mr Geminder because it was “neither fair nor reasonable”. The offer is scheduled to close on November 8.
Pact chief executive Sanjay Dayal is in the final stages of a $20 million cost-cutting drive. About 175 staff were made redundant in Australia and New Zealand in August and
Read more on afr.com
