Boral Ltd has again advised its shareholders to turn down an offer from Seven Group Holdings (SGH) to sell their stakes in the construction materials supplier.
With Boral’s share price at $6.77 per share at time of writing, the price offered by SGH would be a loss for shareholders. The SGH Offer at $6.50 – the closing value for Boral on Monday, 10 May – began on Tuesday, 25 May.
Boral’s Independent Board Committee has once again insisted shareholders take no action on the deal, citing the stronger share price.
A statement from Boral chairman Kathryn Fagg said the off-market offer from SGH was “unsolicited,” “opportunistic” and “undervalues the company”.
“We are confident in Boral’s strategy and remain committed to our transformation targets set across the group to deliver value for all our shareholders.”
The Bidder’s Statement released by SGH outlined how the company would like to increase its stake to at least around 30 per cent of Boral.
In the statement, SGH believed that $6.50 will become a premium to future Boral share prices, especially in consideration of the lack of brokerage fee attached to the SGH offer.
“SGH believes that the Offer delivers a premium relative to longer-term trading prices in Boral Shares,” the statement read.
If the Offer brings SGH to or above a 90 per cent stake in Boral, the Bidder’s Statement said SGH planned to remove Boral’s listing from the Australian Stock Exchange.
The Offer from SGH to Boral shareholders will close on 25 June, one month from the date of opening.
USG Boral sale and share buyback
Meanwhile, Boral completed the sale of its 50 per cent share in the USG Boral joint venture to Gebr Knauf KG (Knauf) for $USD1.015 billion ($AUD1.33 billion).
Boral’s profit on the sale is expected to be in the vicinity of $450 million.