AN activist investor has raised the alarm over an American hedge fund’s takeover of a British packaging company, attacking its intention to scrap a payout due to shareholders.
Crystal Amber, which has previously targeted Pinewood Shepperton film studios, said Steel Partners was plotting to cut API Group’s final dividend as part of its £46m buyout.
API, which makes foils and laminates used to wrap products sold by companies such as Colgate and L’Oréal, suffered a 20% blow to its interim operating profits in December.
Steel pounced a month later, offering 60p a share — a 28% premium to the previous day’s price, but less than the level API’s shares were trading at last summer.
It is the latest spat to hit London’s AIM market, which has been rocked in recent months by the unravelling of Quindell, the insurance claims processor.
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Steel, run by tycoon Warren Lichtenstein, is understood to be interested in a warehouse site that API owns in New Jersey, which could be redeveloped. API chairman Andrew Turner recommended shareholders accept the bid last week but admitted the price did “not reflect any upside” from the potential sale of the property and a reorganisation of API’s American manufacturing.
Crystal Amber, API’s biggest independent shareholder with 11.8%, said New York-listed Steel, which has a 29.7% stake, had indicated it would drop a 1½p-a-share payout due to investors in the course of the takeover. Crystal Amber is also thought to have offered to buy the New Jersey site for £10m — almost double its value in API’s books.
Richard Bernstein of Crystal Amber said: “It’s a basic and equitable principle that dividends should be paid out of profits. Income investors, including the Employee Benefit Trust [which holds 3.1% of API] depend on them . . . We expect Steel Partners to do the right thing.”
Steel Partners did not respond to our requests for comment.