Geminder family moves to take PACT Group private

Interests associated with the Chairman of packaging manufacturer and recycler PACT Group Raphael Geminder have moved to take over the ASX listed company and take it private.

Privately owned Kin Group through subsidiary Brennamon Industries today launched an unconditional off market offer to buy all the PACT Group shares it does not own at 68 cents a share.

While the company’s shares closed last night at 67.5 cents, they have underperformed the wider market and fallen in value by 73.7 percent since the beginning of 2023.

Kin already controls more than 50 percent of PACT and has taken action following six years of declining sharemarket value and earnings, and a planned downsizing of the business.

According to Kin managing director Nick Perkins accepting the offer would remove share price fluctuations and the risk of Pact shares falling further after the offer closes.

Perkins told investors: “It is highly unlikely that a competing offer will eventuate, given Kin Group has a controlling interest of over 50 percent in Pact.

“And in the absence of Kin Group’s offer, the future value of PACT shares is uncertain.”

Pact is planning to sell 50 percent of its crate pooling business, substantially reducing the scale of the Pact Group business.

Perkins said: “Pact faces a challenging operating environment with supply chain disruptions, inflationary pressures, fluctuating resin prices, labour constraints and macroeconomic uncertainty.

“These factors continue to impact Pact’s operations and financial performance.”

PACT Group is also faced with the need to invest in is business which are embracing recycling and the circular economy.

“Kin Group considers the success of PACT is best achieved under private ownership, without the additional costs, market volatility and complexities of being an ASX company.

“Kin Group believes that privatisation, along with additional investment, will allow PACT to achieve its long-term strategy of growth in the circular economy.”

Further reading:
Pact Group in $500 million recycling pledge
Browse @AuManufacturing’s coverage of Pact Group here.

Picture: Raphael Geminder