Graeme Hart

Wellington, Aug 25 NZPA- New Zealand billionaire Graeme Hart has run into a glitch in his United States takeover of Pactiv Corp, the maker of Hefty bags.

A trade union pension plan has called the deal "fundamentally unfair" to Pactiv shareholders and has mounted a lawsuit against the bid.

Pactiv, its chairman Richard Wambold, seven board members, Mr Hart's Rank Group Investments Ltd and its Reynolds Group Holding Ltd unit in the US were sued today in Illinois state court in Chicago by a plumbers and pipe-fitters union pension fund, the Daily Herald in Chicago reported.

The $US4.5 billion transaction was announced by Pactiv on August 17, but has been opposed by the United Association of Journeymen and Apprentices of the Plumbing and Pipe Fitting Industry of the United States and Canada.

Pactiv had "excellent prospects for future growth", according to the complaint, which called the agreed price unfair. The union plan said company directors breached their fiduciary duty to shareholders by undervaluing the company.

The pension fund has sought an order blocking the transaction until Pactiv's directors obtain the best possible price for shareholders. They also want the court to certify the injured shareholders as a group for purposes of the lawsuit.

The per-share price of $33.25 represented a 39 percent premium over Pactiv's $US23.97 May 14 closing price before the disclosure of negotiations.

The deal was the most expensive yet mounted by Mr Hart, 55, who built his fortune by buying the Government Print assets sold off in the early days of Rogernomics, then expanded his investments in grocery, dairy and retail assets through the Rank Group.