Rich Lister Raphael Geminder poised to snare Pact

Simon EvansSenior reporter

Jan 3, 2024 – 5.47pm

Subscribe to gift this article

Gift 5 articles to anyone you choose each month when you subscribe.

Already a subscriber?

Melbourne businessman Raphael Geminder is set to win full control of ailing packaging company Pact Group as a steady stream of acceptances arrives after a buyout offer was increased on December 11.

Mr Geminder’s privately owned Kin Group told the ASX yesterday it had lifted its stake to 85 per cent, and would speed up payment to shareholders who accepted the 84¢-a-share bid.

Mr Geminder made an original bid of 68¢ a share in mid-September to buy out the 50 per cent of Pact he did not own. But that lowball offer at a minimal premium meant there was little take-up until the billionaire’s investment vehicle increased the bid to 84¢ three weeks ago.

Raphael Geminder and wife Fiona in the Lexus marquee at last year’s Melbourne Cup.

The higher offer valued Pact at $289 million.

Still, a rising sharemarket pushed Pact shares higher than the 84¢ per share bid, with the company’s stock closing at 86¢ yesterday.

Pact, which makes plastic bottles, vitamins containers and coat hangers, had a sharemarket capitalisation of $1.6billion two years ago, but profits were crunched by surging inflation in raw materials, and substantial investment required for it to modernise plants in a bid to deliver greener products.

Kin Group on January 3 warned shareholders who were still holding out that once it moved past 90 per cent it would proceed to compulsory acquisition of the remaining shares, then delist the company from the ASX.

Pact was established two decades ago after Mr Geminder engineered a management buyout of several underperforming Visy assets. He is married to Fiona Geminder, the sister of Visy executive chairman Anthony Pratt.

Pact has been listed on the ASX since 2013, when it raised $649 million in fresh capital at $3.80 a share. It reached as high as $7 in early 2017.

The independent expert, Kroll, said the shares would be worth between $1.06 and $1.51 on a hypothetical scenario that an offshore packaging group would acquire the entire business.

Kroll also said that a valuation range of 83¢ to $1.24 a share was appropriate for the minority stake owned by non-Kin Group shareholders.

Kin Group has investments in retail, packaging and property, including a 20 per cent stake in discount retailer The Reject Shop, 66 per cent of Pro-Pac Packaging, and a 4.5 per cent stake in make-up distributor McPhersons.

Simon Evans writes on business specialising in retail, manufacturing, beverages, mining and M&A. He is based in Adelaide. Connect with Simon on Twitter. Email Simon at simon.evans@afr.com