Hart reported to be chasing Amcor deal

Billionaire entrepreneur Graeme Hart was today reported to be eyeing Amcor Ltd's Australian and New Zealand cardboard box packaging business.

The Independent Financial Review reported investment bankers believed Mr Hart would be an eager buyer of the $785 million of assets in a carve-up of the struggling global packaging company.

Amcor Ltd, the world's top maker of plastic bottles, last week denied it had received any takeover proposal and was not aware of the identity of any party looking to buy its shares on the market.

It made the statement in response to a query from the Australian Stock Exchange following a 5 per cent jump in its shares since Monday on heavy volume.

Its shares last traded up 1.4 per cent at A$7.16, valuing the group at A$6.5 billion ($7.5bn).

The Independent said Mr Hart, who this year completed a $3.3bn takeover of forest products company Carter Holt Harvey, could make a $300m profit from combining Amcor's and CHH's packaging operations to compete with market leader Visy.

Private equity firms are reported to be prowling about Amcor with speculation running that a $7bn bid for the company was in the offing.

Following a 20 per cent share price fall between March and August, Amcor has been seen as vulnerable to a takeover, especially with private equity groups scouring Australia for investments.

Amcor is facing a squeeze on costs and is seen having limited pricing power with its customers.

Amcor has flagged it might sell up to A$1bn worth of assets, so West and analysts said it was more likely that parts of the company might be sold, rather than the whole company.

Amcor has strong cashflows, an asset that has always appealed to Mr Hart.

Mr Hart has been named several times this year as a potential bidder.

Amcor warned in August that profit from its Australasian business, its biggest earning division, would fall this year and it would spend A$300m to fix the underperforming fibre packaging business over four years.

Complicating any takeover or break-up, Amcor is embroiled in a court case with regulators which alleged it and Visy fixed prices. Amcor avoided charges by blowing the whistle on alleged collusion in the corrugated box market, but customers could still seek some compensation in future, depending on the outcome of the case.

Amcor Kiwi Packaging has its head office in Auckland and has plants in Christchurch and Hasting.

The Independent said Mr Hart could replace Amcor's expensive kraft linerboard supply deal with Paperlix when it ends in 2010 with CHH's excess linerboard capacity. Macquarie Research analyst John Purtell estimated the argbitrage value at A$300m.

- NZPA