Valuation throws a spanner into Vertex takeover

The Stewart family's ambitions for Vertex were dealt a blow yesterday after an independent valuation of the plastic packaging group dwarfed their $49 million takeover offer.

The family's investment firm, Masthead, has offered Vertex shareholders $1.90 a share, but valuers Grant Samuel said yesterday that the shares were worth $2.14 to $2.39 each.

The news sparked a 6c rise in Vertex shares, which closed at $1.96 last night after a trading halt was removed. This compares with a price range of $1.38 to $1.95 in the past year.

The company's independent directors now have to decide whether to endorse the takeover offer.

Macquarie Equities investment director Arthur Lim said they would be grappling with a difficult situation.

Without a counter bid, they would need to be careful not to negotiate into a situation where the status quo continued.

"Status quo means a dysfunctional board and more legal action, and a share price that heads south because Masthead is no longer there with a takeover offer."

Interim chairman Tony Frankham restated his advice that shareholders should keep their shares until they saw the valuation report and the recommendation from independent directors, due to be mailed out tomorrow.

Masthead, with 19.9 per cent, launched its bid this month after expressing dissatisfaction with the board's performance since Vertex listed in 2002. It plans to merge the business with rival Alto Plastics, 40 per cent owned by the family.

Key shareholders the Accident Compensation Corporation, with a 4.8 per cent stake, and Vertex managing director Paddy Boyle (1.9 per cent), would not comment on what they would do.

Since Masthead bought its stake for $2.05 a share from Christchurch businessman George Gould last year, Vertex has been embroiled in a boardroom stoush which led to court action in December.

Boyle and independent director Sandy Maier sought a ruling to resolve concerns over the possible invalidity of the three Masthead seats on the Vertex board and potential conflicts of interest.

Last week Frankham called off the action. If the Masthead offer fails, he plans to resolve the matter at a special shareholder meeting.

Masthead director Mark Stewart said he was astonished by the high valuation - 50 to 70 per cent above where shares traded before speculation about corporate activity.

Stewart said he still thought the offer was fair and urged shareholders to think wisely about what was likely to happen if the bid was unsuccessful.