Boral Ltd (BLD AU): Seven's Nil Premium

• After completing 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 to A$1.5bn from A$1.9bn, and apply the remaining proceeds to commence a buyback.

• Boral aims to buy up to 10% of shares out, or ~122mn shares, at a cost of A$670mn based on the then-prevalent share price. CEO Zlato Todorcevski said: “we believe that an on-market buy-back is the most effective method of returning this surplus capital to our shareholders.”

• As of this morning, Boral had bought back ~10.15mn shares.

The New News

• After the close of trading today, 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%.

• The Offer is expected to open on May 25 and close on June 25, unless extended.

• It's a strange Offer, one that Boral's board will likely reject.

• More below the fold.