buy time, page-5

dct

Thats a big call. The PACT group is larger enough to IPO directly and wouldnt waste time through a back door listing.

The only reason why PACT have increased their holding in PPG is because someone made a play for PPG so the Board went to PACT to see how they felt about it and hence why they bought out CVC who wanted out.

PACT is limited in Australia and I suspect that they will be looking at overseas acquisitions and not focussed on whats happening locally, so once again a back door through PPG doesnt add up.

Yes PPG can grow with PACT through cross selling, but PPG's Rigid plastics division is a direct competitor to PACT and PACT has a history of allowing each division to run its own show even to the detriment of another division as this keeps the business agressive and keeps new entrants out.

If you look at the M&A, its all been in consumables which is a tough slog. If currency comes back they will be challenged at the margin line.

Remember, PACT also had a grip on NCI but allowed Tyrell to take over them so that PACT could get Viscount.

Is there upside in PPG, yes, is it huge I dont think so. Remember you can do all the acquisitions you want but you have to integrate them and PPG have been buying business bellow $10m and integrating them is a costly exercise and makes getting a return harder.

I suspect they can see some upside, but on the other hand I believe they are at risk of losses from competitors which will hurt them even with the acquisitions in tow!