Vertex's mystery bidder backs off

Vertex's mystery suitor has spurned the plastics packaging company, leaving a clear field for the bid by Christchurch's Stewart family.

The company said yesterday the offer it had anticipated would rival the Stewart's $49 million takeover bid was no longer going ahead.

The counter bidder - believed to be another plastics industry player - had found the natural fit between the two businesses was not as strong as it first thought.

The $1.90 a share offer by the Stewart's investment vehicle, Masthead, was now the sole offer on the table. It was due to close on April 26.

Emergence of any other bid was seen as unlikely, but not everyone was convinced the withdrawal of the mystery bidder would hand control of Vertex to Masthead, which already has a 19.9 per cent stake.

First NZ Capital analyst Dwane Clark said given Masthead's $1.90 offer price was still well below the $2.14 to $2.43 range independent valuers believed Vertex shares were worth, it would still need to increase its bid to secure the company.

"It doesn't actually change a lot ... when the initial offer came in people were quite happily buying Vertex shares above $1.90," he said.

Yesterday, Vertex interim chairman Tony Frankham reiterated independent directors' advice that shareholders should do nothing about the Masthead offer.

The second bidder's decision not to proceed came after Frankham had pressed them for a decision on Thursday. The counter-bid had been seen as a blow to the Stewarts' ambitions for Vertex as it was tipped to be at least 12 per cent higher than Masthead's offer.

Frankham would not disclose who the unknown bidder was, although market speculation was that the interest had come from Australia's Visy. The Melbourne-based company is one of the world's largest privately owned packaging operations with revenues of more than A$2.8 billion ($3 billion) and over 8000 employees.

The second offer had been due last week and Vertex said the bidder had already undertaken a "high level" of due diligence. Masthead director Mark Stewart would not say whether there was any potential for Masthead to raise or extend its own offer.

Masthead bought its 19.9 per cent stake in Vertex from Gould Holdings in September for $2.05 a share.

Since then, Vertex's boardroom has been at loggerheads, which in December culminated in court action. The action led by Vertex managing director Paddy Boyle was taken against Masthead-appointed directors but was dropped after the Masthead bid.

Frankham became independent chairman after a High Court order in December. He has said he plans to resolve the board dispute at a special shareholder meeting if the Masthead takeover is unsuccessful.

If it does succeed, Masthead has said it plans to merge the company with Alto Plastics, in which it has a 40 per cent stake. Vertex shares fell 15c yesterday to close at $1.90.