Kerry Stokes’ Seven Group has altered its $8 billion bid for Boral a little, making the $6.50 a share offer unconditional and allowing investors who accept the price to be paid in 7 days.
In effect the change removes the no material adverse change clause from the offer, with the closing date now extended to close of business on June 30, the final day of the current financial year.
The Seven announcement also revealed that it now held a stake of 24.19% of Boral, up from 24% a week ago and just over 23% when the bid was launched on May 10.
There was no sign of a higher price from Seven, despite some speculation that there would be to counter the $2.9 billion in cash Boral will be getting from the sale of the remaining US building assets.
Boral has raised more than $4.3 billion from three major asset sales since late 2020 and has used this to slash debt, reinvest in the business and to underwrite a promised capital management move.
Seven Group claimed the deal was done at a loss and had hurt Boral but that’s chagrin speaking because the current management and non-Seven board are doing a good job of unwinding the mistakes made under the previous CEO, Mike Kane, and few of the kudos and cash is flowing to the Stokes camp.
Tuesday’s announcement did little to hide the fact that at $6.50 a share Seven’s offer is way out of the money with shares last trading at $6.90 thanks to the company’s buyback (and Seven’s relentless creeping buying attack.
Seven Group is in fact benefiting by doing nothing and could have saved on the expense of the no premium bid.
The continuing buyback from Boral (as we pointed out yesterday) will lift Seven group lift its stake in Boral to around 25%. That will not be around 26% with the small 1% plus of acceptances.
Boral is conducting a share market buyback at up to $7.12 each. Boral reported it had acquired more than 61 million shares as of June 22 (at a cost of more than $409 million) and could buy back up to 122 million shares this year which is equal to 10% of its issued shares.
Boral shares were higher for part of the session but slid in late trading to close at $6.85, down 0.3%.
Claims there would be an avalanche of buying from Seven proved elusive – 8.68 million shares were traded, down from more than 18 million on Monday which was the second highest daily volume of the year so far.
