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Australia's Boral (ASX: BLD) has advised investors to consider accepting a takeover bid from its largest shareholder, Seven Group Holdings (ASX: SVW), amounting to up to AU$1.5 billion ($980.70 million). This recommendation follows negotiations that resulted in an augmentation of the cash portion of the deal.
Controlled by billionaire Kerry Stokes and his family, Seven Group has increased its ownership in the building products maker from 71.6% to 78.8% since initially expressing interest in acquiring full control of Boral in February. The updated proposal from Seven Group now includes 0.1116 Seven Group shares and AU$1.70 in cash and dividends for each Boral share not already owned by Seven Group.
This revised offer surpasses the earlier proposition, which featured a cash component of AU$1.50 per share and was subject to escalation if certain conditions were met. Boral's independent directors previously advised shareholders to reject the initial bid, asserting that it undervalued the company based on an evaluation conducted by an independent expert.
Under the enhanced offer, Boral shareholders stand to receive between AU$6.16 and AU$6.39 per Boral share, inclusive of dividends from both entities and AU$0.13 per share in franking credits. Following the announcement, Boral shares surged by 1.49% to close at AU$6.12 apiece, while Seven Group shares saw a marginal uptick of 0.100% to AU$40.07 on 12 April 2024.
Boral disclosed that independent expert Grant Samuel deemed Seven Group's revised proposal to be reasonable. Additionally, the new agreement grants Boral the option to repurchase up to AU$350 million worth of shares on the market.
The revised takeover offer marks a significant development in the ongoing negotiations between Boral and Seven Group. With both parties expressing confidence in the updated terms, investors now face the decision of whether to accept the proposed deal. The outcome of this transaction could have substantial implications for the future trajectory of both Boral and Seven Group Holdings within the Australian market.
