© Reuters. FILE PHOTO: A worker watches as his truck, emblazoned with the logo of Boral Ltd, Australia's largest supplier of construction materials and products, is loaded with cement in Sydney, Australia, November 23, 2016. REUTERS / David Gray / Ph Archive
(Reuters) – Australian diversified investor Seven Group Holdings made a bid on Monday to take full control of Boral (OTC:), valuing the remaining stake of around 28% it does not already own in the construction materials maker at 1,900 million Australian dollars ($1.24 billion). ).
Seven Group (SGH) currently owns a 71.6% stake in Boral. Under the offer, Seven Group will offer a minimum of A$6.05 per share in cash and shares to Boral shareholders, valuing the company at A$6.67 billion ($4.35 billion).
The minimum bid represents a 3.4% premium to Boral's last closing level of A$5,850.
“By acquiring the Boral shares it does not already own, SGH aims to drive an acceleration of Boral's performance and long-term growth,” Seven Group said in a statement.
“The integration of Boral into SGH is consistent with the group's owner-operator strategy and would increase SGH's strategic flexibility and access to Boral's cash flow.”
Boral in a separate statement advised its shareholders not to take any action on the takeover offer, adding that an independent board committee had been established to review the offer.
In 2021, Seven Group made multiple takeover bids to acquire Boral, which it continued to reject citing the undervaluation of its business.
Seven Group ended up accumulating around 71% of its stake in just a few months in 2021, as historically low interest rates boosted Boral's domestic business, generating interest from buyers.
Seven Group added on Monday that it will increase its offer for Boral by another 10 Australian cents if it reaches a full 80% stake in Boral or if Boral's board unanimously recommends the offer to its shareholders, or both.
The offer would increase by another 10 cents if Seven Group's stake reached 90.6%, the mandatory takeover threshold.
However, Seven Group clarified that it would not purchase Boral shares worth more than A$6.25 each for at least a year after the deal closes.
($1 = 1.5321 Australian dollars)
