Boral Ltd (BLD AU) Rejects Seven's Bump

Following the $1.3bn sale of its 50% stake in USG Boral to Knauf Gips KG, international building and construction materials play Boral Ltd (BLD AU) announced on April 1 it would use the proceeds to reduce net debt, and apply the remaining proceeds to commence a buyback. Boral aimed to buy up to 10% of shares out, or ~122mn shares, at a cost of A$670mn based on the then-prevalent share price.

On the 10 May, Seven Group Holdings (SVW AU) announced an off-market takeover at $6.50, a nil premium to last close. There are essentially no conditions to this Offer. There is no minimum acceptance condition. Seven currently holds ~23.18% and would be "satisfied" for the Offer to result in a holding of around 30%.

It was a cheeky Offer to ostensibly work around the creep provisions in the legislation, and Boral's board not altogether surprisingly, recommended shareholders reject the Offer in its Target Statement on the 9 June. The Independent Expert came out with a fair value range of A$8.25-A$9.13/share, and concluded the Offer was not fair or reasonable.

Seven has now bumped its Offer: it will pay $7.30 cash if they get to 29.5%. Or $7.40 cash if they get to 34.5%.

The revised Offer was expected to be summarily rejected, which it was. But with a closing price of A$7.34 on Friday, A$7.40 may well get up.

More below the fold.