The share price of ASX-listed packaging company Pact Group Holdings Limited (AU:PGH) skyrocketed today by over 22% after billionaire businessman Raphael Geminder’s Kin Group made a final and improved offer of AU$0.84 per share to take the company private. The new offer values Pact Group at AU$289 million and represents a substantial increase from the initial proposal of AU$0.68.
The investment company Kin Group submitted the bid through its subsidiary Bennamon Industries and aims to delist Pact Group from the ASX once the deal is finalized.
Pact Group is a manufacturer and supplier of sustainable packaging products, known for its innovative solutions.
Background of the Deal
Kin Group, which already owns more than 50% of Pact, has been eyeing the acquisition of the remaining stake since September 2023. In October, Pact Group rejected the offer, stating it was “neither fair nor reasonable.”
Consequently, Geminder was compelled to increase his bid for the company. Pact Group’s board of directors is now advising shareholders to accept the revised proposal. The company’s second-largest shareholder, Investors Mutual, has also come forward in support of the offer, encouraging others to join.
In its annual results for FY23, Pact Group reported a 6% increase in its underlying revenues to AU$1.95 billion. However, the underlying net profit declined from $70 million to $45 million. Moreover, the company eliminated its final dividend, which was previously 5 cents per share in 2022.
The Pact Group share price has experienced a 20% decline in the last 12 months and a substantial drop of over 60% over the past three years due to the company’s weak earnings and high debt levels amid supply chain issues, inflation, and labour shortages.
