Merchant, who was valued at $874 million on the BRW Rich 200, has been a long-time investor in Plantic, which was established in 2001 and is listed on London's Alternative Investment Market.
Merchant, who currently owns just under 19% of the company, announced his intention to take the company private via a scheme of arrangements.
Shareholders and option holders will meet in Melbourne on November 17 to approve the deal, which recommended unanimously by the company's board.
Representatives from Merchant's investment company that has made the takeover offer, a company called Gordon Merchant No 2 Pty Ltd, declined to comment on the deal prior to the shareholder meeting.
The chief executive of Plantic, Brendan Morris, also declined to comment.
Plantic, which employs 56 people around the world and has a bio plastics manufacturing plant operating in Germany, was born out of the Federal Government's CRC program. The CRC for international food manufacturer and packaging science concentrated on the use of corn starch to create bio plastics trays.
The company's German manufacturing plant became operational in February 2009 and the company now has five product lines on sale around the world, with sales offices in Australia, the US and Britain.
In the six months to June 30, the company had sales of $927,000 but posted a loss of $15.5 million, dragged down by fixed asset impairment charges of more than $9 million. The company has $9.4 million in cash on its balance sheet.
Merchant's motivations for the takeover have not been revealed by the company, but there is little doubt that the continued slide in Plantic's share price means it is now attractively priced.
Since listing on the AIM in May 2007, Plantic's shares have fallen steadily from just below 80p to just below 5c. Merchant's offer, priced at 8pc, allows him to pick up the entire company for a fraction of its original value on listing.
If shareholders approve the buyout, the transaction is expected to be completed by mid December.
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