Tensions between Caxton, Mpact boil over

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Paper and plastics packaging and recycling company Mpact has hit back at Caxton's allegations about its conduct.
Paper and plastics packaging and recycling company Mpact has hit back at Caxton's allegations about its conduct.
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  • Tensions between Caxton and Mpact have boiled over in recent days.
  • Caxton on a 34% stake in Mpact, and wants to acquire the group.
  • But Caxton has accused Mpact of making of "secret" submissions to the competition authorities.  
  • Get the biggest business stories emailed to you every weekday, or go to the Fin24 front page.

Long-simmering tensions between packaging producer Mpact and publishing and printing company Caxton have erupted in recent days.

Caxton owns 34% of Mpact, and wants to take control of the group.

On Friday, Caxton released a statement denying that it had ulterior motives for voting down Mpact's non-executive directors' remuneration policy at a recent annual general meeting.

According to Caxton, Mpact CEO Bruce Strong told investors that the two companies battled to reach an understanding because Caxton had a "different motive". 

But Caxton said that was not the case, and that it was "vitally interested" in the success of the package maker.

READ Mpact posts strong profit growth, but warns of price hikes 

"Far from having an ulterior motive, Caxton's stated intention to acquire control of Mpact has been met with inexplicable hostility," said the publisher. 

Caxton explained that the reasons for its vote were due to Mpact allegedly not sharing enough details regarding an ongoing case, in which the package producer is accused of operating a cartel with its competitor, Golden Era.

Caxton accused the Mpact board of filing "secret representations and affidavits" before the Competition Commission and Tribunal, which it says were "exacerbating concerns held by Caxton that Mpact and Golden Era remain involved in the vestiges of their long-standing cartel".

However, Mpact hit back with its own statement on Wednesday, "strongly" denying Caxton's allegations.

"It has long been a matter of public record and reported in the company's annual financial statements that Mpact is cooperating transparently and in good faith with the Competition Commission regarding the [cartel] investigation initiated in May 2016," said Mpact.

The company further said the commission is not looking to impose a penalty against it.

READ | Rain forced to withdraw Telkom merger statement

As for the offer, Mpact said Caxton filed a merger notification in 2021 with the Competition Commission, seeking its approval for its bid for Mpact, before it approached the company's board or shareholders.

Mpact said its board declined to support a merger with Caxton because the publisher had not provided a price or conditions. 

The company added that it has also rejected an "unlawful" demand from Caxton on Monday, for a shareholders meeting to be convened.

"To date, the Mpact Board has not received any form of offer from Caxton. Should we receive one, the board will appoint an independent board to diligently assess the merits of such an offer and to make the requisite recommendations to shareholders," Mpact concluded.


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