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January 27, 2012 7:42 am
John Gummer, the former Tory minister memorably pictured eating a hamburger with his daughter during the mad cow disease scare, has helped pull off a £2.5m management buy-out of a company he has chaired for more than a decade.
The move comes despite criticism from one rival who claims the bid backed by Mr Gummer, now known as Lord Deben, is far too low.
It was set up in 1997, when Lord Deben was environment secretary in John Major’s government, to help businesses comply with new rules on recycling packaging waste, and has since branched into environmental consultancy and other services.
The company reported a pre-tax profit of £1.1m on revenues of £55.7m for 2010.
Uncertainty about the policy landscape led Valpak, which has 4,000 members, to consider restructuring itself last year, according to people close to the company, and Lord Deben backed a £700,000 management offer for the business last summer.
Consideration of this bid was suspended after several other groups started to express interest.
But Valpak’s independent directors ultimately recommended a fresh management-led buy-out which includes Greenpoint, a Luxembourg holding company that owns DSD, a leading German recycling compliance service group.
The new offer was approved by nearly 91 per cent of voting members at a meeting on Thursday, the company said in a statement, in a deal that will see the management team acquire 70 per cent of the business and Greenpoint Holdings the remaining 30 per cent.
But it was immediately criticised by Peter Hunt, managing director of Wastecare, a rival recycling compliance company based in Leeds.
Mr Hunt said he made a rival offer last year for Valpak that was “several times greater” than the £2.5m bid approved on Thursday and he could not understand why the management buy-out had been accepted.
“Obviously 4,000 people have given away a huge amount of money collectively,” he said. “There is no other way to see it.”
Valpak’s senior independent director, Gerry Orbell, declined to respond to Mr Hunt’s claim, and calls to Lord Deben were not answered.
But Mr Orbell said all expressions of interest had been carefully considered and he was confident the bid by management and Greenpoint “offered the best option for members, employees and the future of the company”.
“Throughout this process, the feedback from members has been overwhelmingly positive,” Mr Orbell said. “It has never been about the money, but about the best people who can continue to provide the best value-adding services.”
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