The Australian Government Takeovers Panel has declined to conduct proceedings on an application from Pact Group shareholders Jeremy Machet and Scrap Invest Pty Ltd, and Jeremy Raper, confirming that the company’s EGM on 12 June will vote on the delisting.

The panel said this was because it was not satisfied that the circumstances set out in the applications concerning the proposed delisting had or were likely to have an effect on the control, or potential control of Pact Group, or the acquisition, or proposed acquisition, by a person of a substantial interest in the company.

“Therefore, the panel was not satisfied that these matters fell within its jurisdiction. The panel concluded there was no reasonable prospect that it would make a declaration of unacceptable circumstances. Accordingly, the panel declined to conduct proceedings,” the Takeovers Panel said.

The panel will publish its reasons for the decision in due course on its website.

Raphael Geminder owns 88 per cent of Pact Group’s shares. Previously, in an attempt to take full control of the company, he told shareholders to sell their shares to him; otherwise, he would seek to delist. Failing to reach the 90 per cent shareholding line with a minority of the shareholders, he proceeded with the delisting process.

On 29 April, Pact Group announced its intention to delist from the ASX, pursuant to ASX Listing Rule 17.11, and that it had submitted a formal request to ASX to be removed from the official list.

On 5 May, the company announced that ASX had approved the formal delisting request. The request for removal from the official list is subject to, among other things, approval by a special resolution of Pact Group’s shareholders. It stated that it would send a notice of meeting to shareholders in respect of an EGM to be held on 12 June, to vote on delisting.

However, on 9 May, the Australian Government Takeovers Panel received an application from Jeremy Machet and Scrap Invest Pty Ltd, claiming the low liquidity of Pact Group’s shares and the short window to sell before the shares are suspended from quotation on 14 July pressured shareholders to sell at depressed prices or hold illiquid unlisted shares.

In addition, it stated the notice of meeting for EGM may lack balanced information and allows Geminder to exercise its 88 per cent holding to vote for the delisting, while also being in a beneficial position to acquire additional shares, and that Pact Group continues to frame the company’s position negatively while downplaying positive developments, potentially misleading shareholders about the company’s fair value and prospects, influencing their decision on the delisting.

Jeremy Machet and Scrap Invest Pty Ltd claimed these circumstances are unacceptable because they affect the control of Pact group by facilitating Geminder’s consolidation of ownership in a way that contravenes the purposes of Chapter 6 of the Corporations Act 2001 (Cth) and that they undermine an efficient, competitive, and informed market.

A similar application was received by the Takeovers Panel on 13 May from Jeremy Raper, stating that the reasons disclosed for the proposed delisting are false and misleading, the board is not acting in the best interests of shareholders in endorsing the proposed delisting, and that the proposed delisting has a substantial coercive effect upon minority shareholders.

With the panel now declining to conduct proceedings, the company’s EGM on 12 June will vote on the delisting.