Australian billionaire's family office steps up pressure in $55 million takeover bid
Raphael Germinder, executive chairman of packaging giant Pact Group and founder of the Kin family office, has demanded the Australian discount store The Reject Shop release its sales figures early after rebuffing the retailer’s assurances its profits remained steady during the Christmas period.
Allensford, the bidding vehicle of Germinder (pictured), launched a $1.54 a share on-market takeover bid in mid-November after The Reject Shop issued a 40% profit downgrade from $12 million to between $7 million and $7.8 million, citing tough retail conditions in October.
It also suffered a fall in comparable sales heading into December, down 3.1% in financial year to 25 November, with a fall of 4.9% in the last six weeks of that period.
But The Reject Shop’s board urged investors to reject the offer, accusing the Geminder family of being opportunistic and trying to buy the retailer “on the cheap”.
In a trading update last week, Reject Shop chairman Bill Stevens (pictured right) moved to reassure shareholders by revealing he expected to deliver a net profit of about $7.4 million for the December half, in line with the guidance issued in October.
“Amid a backdrop of highs and lows over the past few years, your board continues to believe in the long-term growth prospects of The Reject Shop’s business,” Stevens said.
However, the retailer did not disclose total sales or same-store sale, cost of doing business or gross margins, prompting Allensford to call for more details so investors could make “an informed decision regarding the opportunity to sell their shares”.
“Given the steep decline in sales performance since August Allensford believes it is incumbent on the TRS Board to provide an immediate sales update to its shareholders,” Allensford director Nick Perkins told The Australia Financial Review.
“The company needs to recognise that shareholders are wise enough to understand that short-term profits can be achieved by managing costs but this may come at the expense of the medium-term health of the business—this is why sales information is absolutely critical.”
Responding to the demands, Stevens said the company had no plans to issue a sales update, given that audited first-half results are due to be released on 20 February.
“The board will report in accordance with our normal timetable,” he said.
Allensford is a bidding vehicle created by the Geminder family’s $1.5 billion family office Kin Group, headed by Raphael and Fiona Germinder. Fiona is one of two billionaire daughters of Richard Pratt, the founder of Australia’s largest plastic packaging manufacturer Visy Asia-Pacific. Since the patriarch’s death in 2009, the packaging giant has been run by his son Anthony Pratt. Sisters Fiona and Heloise Pratt still hold large stakes in Visy Asia-Pacific.
