Gutnick switches support in Merlin bid: report

Chairman buys stakes in suitor, sells down holding in Melbourne diamonds group.

A bid for Merlin Diamonds has collapsed after chairman Joseph Gutnick switched support from takeover target to suitor during the offer period, The Australian reports.

According to the newspaper, Singapore investment company InnoPac Holdings gained acceptances for 73 per cent of Merlin shares when the offer closed on Friday night, below the 90 per cent minimum level set in its bidder's statement.

InnoPac said it decided to let the offer lapse rather than increase its offer of 28 cents per share, a 125 per cent premium on yesterday's closing share price.

The Australian reports that Mr Gutnick bought a major stake in InnoPac after the firm announced its bid, then sold down his controlling stake in Merlin.