Boral Takeover: Seven Group Holdings Makes $1.24 Billion Offer for Full Control
Australian diversified investor Seven Group Holdings has made a bold move to take full control of building materials maker Boral. The offer, valuing the remaining 28% stake at A$1.9 billion ($1.24 billion), aims to increase Seven Group’s ownership from its current 71.6% stake. The offer will be made in cash and scrip, with a minimum of A$6.05 per share, valuing Boral at A$6.67 billion ($4.35 billion).
According to a statement from Seven Group, the acquisition of Boral’s remaining shares is seen as a strategic move to drive the company’s performance journey and long-term growth. With the integration of Boral into Seven Group’s portfolio, the company hopes to enhance its strategic flexibility and access to Boral’s cash flow.
In response to the takeover offer, Boral has advised its shareholders to take no immediate action. The company has established an independent board committee to review the offer and provide recommendations. This move comes after multiple takeover offers from Seven Group in 2021, all of which were rejected by Boral citing undervaluation of its business.
The rapid increase in Seven Group’s stake in Boral can be attributed to record low interest rates, which have boosted Boral’s domestic business and attracted buyer interest. Seven Group has expressed its commitment to the takeover by indicating that it will raise its offer for Boral by another 10 Australian cents if it achieves an aggregate 80% stake or if Boral’s board unanimously recommends the offer to its shareholders.
However, Seven Group has also outlined a limit to their offer, stating that they will not purchase Boral shares above A$6.25 apiece for at least a year after the offer closes. This clause provides additional protection to Boral shareholders and ensures a fair valuation for the company.
The Boral Takeover is set to have a significant impact on the building materials industry in Australia. If successful, Seven Group’s increased ownership and integration of Boral will likely lead to advancements in Boral’s performance and long-term growth. As the independent board committee reviews the offer, shareholders will eagerly await their recommendations on this bold acquisition move.
Article Keyword: Boral Takeover
Analyst comment
Positive news. Seven Group Holdings has made an offer to take full control of Boral, valuing the company at A$6.67 billion. This offer represents a 3.4% premium to Boral’s last closing level. If successful, Seven Group intends to drive Boral’s performance and long-term growth. Boral has recommended its shareholders take no action on the offer, and an independent board committee will review it. The offer may increase further if certain conditions are met. Market is likely to respond positively to the offer, considering the potential for increased strategic flexibility and access to Boral’s cash flow for Seven Group Holdings.
