Boral has responded publicly to Seven’s takeover bid. Image: T.Schneider//Shutterstock.com
The battle for total control over Boral is over after Seven Group Holdings garnered support for its takeover bid.
The Boral bid response committee (BRC) revised its stance on the takeover bid after noting several changes since the bid was launched in February.
SGH, which had a majority share in Boral prior to the bid, had seen its interest grow by 7.2 per cent to 78. Per Cent as per April 12. The BRC noted “proposed changes by SGH to Boral governance arrangements” and the “consequences” from those changes to Boral as a result.
The BRC re-negotiated a new deal for Boral shareholders after rejecting the initial offer. The extra concessions include increasing the offer’s cash component from $1.50 to $1.70, Boral’s investors receiving a 26¢ dividend in April from Boral, Seven paying a fully franked 30¢ dividend, and an on-market buyback of shares up to the value of $6.42. According to Boral’s statement, the total value for shareholders under the deal is between $6.16 and $6.39 per share, as well as 13¢ in franking credits.
With the revised deal, the BRC changed its view and recommended shareholders accept the SGH offer or sell their Boral shares. In its reasoning, the BRC outlined, among other things, that a higher offer was unlikely due to SGH’s interest in Boral and SGH’s proposal to change the board.
In the initial bid statement, SGH had highlighted its intention to “re-constitute” the Boral board, with two additional SGH seats on the board. The proposed move would have given SGH decision-making control over Boral’s governance, strategy, day-to-day operations, management and capital allocation. It may have also delisted the company from the ASX and deferred dividend payments.
“This would result in Seven Group Holding nominees having effective control of decision-making on the Boral Board and would reduce the influence of independent voices,” Boral said in its statement.
Independent assessor Grant Samuel has ruled the new standing offer is “reasonable” considering the new factors. Previously, the assessor viewed SGH’s offer as “not fair or reasonable” which SGH disagreed with publicly, stating it was “extremely disappointed”.
The Boral takeover expands SGH’s considerable portfolio. The firm also controls Westrac, Coates Hire, a large portion of oil and natural gas producer Beach Energy and a major stake in Seven West Media.
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