Vertex takes legal advice on Gould's stake

Embattled plastics company Vertex has obtained legal advice suggesting prominent Christchurch businessman George Gould unjustly "enriched" himself in selling his cornerstone stake to the Christchurch-based Stewart family.

Details of the opinion emerged this week in a report assessing the Stewarts' $49 million bid for the company.

They coincided with news that a rival was preparing a bid to top the family's $1.90 a share offer.

The report said Vertex had sought the legal opinion to see if there was value in action against Gould's vehicle Gould Holdings.

The claim relates to Gould and an associate using a casting vote to support the appointment to the Vertex board of three men linked to the Stewarts' investment firm, Masthead.

"It would appear the appointment of the [Masthead directors] ... was a requirement of Masthead," the report said.

The switch came just after Gould Holdings sold its shares to Masthead for $2.05, a 40c premium to the market price.

The appointments led to a boardroom deadlock, which was eased only after the court appointed accountant Tony Frankham as interim chairman in December.

Frankham said: "Nothing is being done about it in the meantime. The most important thing at the moment is the takeover bid.

"Once the ownership of the company settles down and the constitution of the board is known, it will be determined by the then board as to whether any legal action should be commenced."

Gould immediately hit back, saying the Grant Samuel report had made a blunder in suggesting the Gould Holdings/Masthead deal included delivery of control to Masthead.

Gould said the report's comments were "simply wrong" and that Grant Samuel had not tried to check the facts with him or Stewart.

He said there was no requirement in the sale for Gould Holdings to support the appointment of three Masthead nominees as directors.

He had used his casting vote in favour of the appointments only after the transaction was settled because he believed it was in the best interests of Vertex.

He dismissed the suggestion of unjust enrichment from the sale at $2.05 as nonsense, as the Grant Samuel report valued the shares at between $2.14 and $2.39.

Grant Samuel declined to comment.

Vertex would not name the new bidder, but said it had indicated it was interested in making a cash offer for all the shares at a price that fell within the Grant Samuel range.

The company's independent directors were negotiating with the party to clarify preconditions for the offer.

If these were agreed on, Frankham hoped the offer would go ahead towards the end of next week.

Vertex shares rose 1c to close at $2.02 on Thursday.

All go

* Vertex shareholders are subject to a $1.90 a share takeover offer from Masthead.
* Another party has now signalled it intends to make a full cash takeover offer, likely to top Masthead's bid.
* Legal advice suggests former 19.9 per cent shareholder George Gould 'enriched himself' in selling his stake to Masthead.