Vertex court action called off

Vertex interim chairman Tony Frankham has called off court action linked to the plastic company's boardroom stoush, saying shareholders will be asked to resolve the issues if Masthead's takeover bid fails.

In a letter to shareholders yesterday, Frankham said a special meeting of shareholders would be called to resolve composition of the Vertex board if the $1.90 bid by Masthead Equities did not go unconditional.

"The litigation has, therefore, served its purpose and it's in the company's interest that it be now discontinued," he said.

"Your independent directors are in discussions with Masthead on this and expect to be in a position to proceed along these lines either with or without the agreement of Masthead."

Frankham was confident of finding a long-term solution in the next few months.

He said the legal action brought by the company over the Masthead appointments had been valuable.

"It has directly or indirectly resulted in the re-establishment of improved communication at board level through the appointment of an independent chairman, and it has been a factor in Masthead issuing its takeover offer."

Boardroom feuding started in September when private investment company Masthead - owned by the Stewart family of Christchurch - bought Gould Holdings' 19.1 per cent stake for $2.05 a share.

In December, managing director Paddy Boyle and independent director Sandy Maier asked the court to declare Masthead's appointment of its directors, Mark Stewart, Warwick Webb and Warren Bell, illegal given Masthead's 40 per cent stake in rival plastics moulding company Alto Plastics.

The board reached such an impasse that on Christmas Eve Frankham was appointed as chairman by a High Court order.

Stewart estimated the total costs to Vertex and Masthead from the court action to be $500,000 so far.

Earlier this month, Masthead launched its takeover for Vertex, expressing dissatisfaction with the board's performance since the company listed in 2002.

The offer, which values the company at about $61 million, is conditional on Masthead achieving a 90 per cent stake.

The offer is due to close April 11.