Valpak decision suspended indefinitely

A vote was due to take place at the Valpak offices in Stratford-upon-Avon next Thursday (September 29) to decide whether a proposed management buyout should go ahead or whether the company should consider outside expressions of interest in the business instead.

But, the companys non-conflicted directors, who have been asked to decide on the best way forward, wrote to membersearlier this week explaining that they needed more time to draw up their recommendations.

Valpak has a large membership including major companies such as Cadbury, J Sainsbury, Tesco and all its members own a share in the business which is not-for-profit. Now members have been told that they do not need to attend the meeting next week, with no new date set as yet.

This means that a decision over the future of Valpak has been postponed for a second time in two months. The proposed buy-out was originally due to be voted on at a meeting on August 18, but this was adjourned to September 29 when the outside expressions of interest were first received (see letsrecycle.com story).

In 2010, Valpak had a turnover of 55.7 million, with direct costs of 40.3 million. The companys executive directors and senior management were proposing to buy the business for an initial cash consideration of 697,000, followed by a further potential consideration of 1,125,000 equivalent to 170 and 270 respectively for each member.

The latest development is likely to intensify the uncertainty surrounding Valpak and disappoint those who were hoping for a swift resolution. It also raises questions over the nature of the expressions of interest received with no details released of potential suitors.

Meeting

Duncan Simpson, director of sales and marketing at Valpak, told letsrecycle.com that the meeting next Thursday will still take place for legal reasons, but only to allow Valpak to record the fact that the process has been suspended.

He said: A communication was sent to members yesterday (13th) to say that the process will be suspended further indefinitely. The non-conflicted non-executive directors are still digesting the information regarding the outside interest they have and still deciding on the next steps – they need time to think.

Mr Simpson added that, once the non-executive directors had had enough time, they would let the membership of Valpak know their recommendations.

He said: The next communication will let people know the next steps what they think the membership should do. Its important they take the time to make the correct decision.