The market in Boral shares will be a hotbed in coming days after Seven Group Holdings was forced to boost its share price to a realistic level of well over $7 a share.
In fact the non-Kerry Stokes members of the Boral board and its management have made Stokes and the board of Seven Group blink and lift its lowball $6.50 offer to a top price of $7.40 a share.
Boral, though, has rejected the higher offer, saying it still undervalues the company’s shares.
Boral said in a statement to shareholders, “There is no certainty that the conditions to the Revised SGH (Seven Group Holdings) Offer will be satisfied and that the increased Offer Prices will become payable, in which case if you accept the SGH Offer you will receive $6.50 per Boral Share.”
“The Boral independent board committee continues to unanimously recommend that you reject the Seven Group offer and the revised offer, as both still undervalue your Boral shares,” Boral said in its statement to the ASX late Friday evening.
But analysts expect Seven Group will be flooded with shares by Friday, July 2 which will allow investors to push profits (and any capital gains into the 201-22 financial year.
Seven group announced on Friday that it had decided to lift the price from the nil premium $6.50 a share offer first revealed in March.
Seven raised its offer to $7.30 on the condition it will be able to increase its stake in Boral from 23.9% to 29.5% by this Friday (July 2).
Seven said it will further increase its offer to $7.40 per share if it can take a 34.5% in Boral by July 7.
The higher offer came just after midday Friday and the Boral share price ended up 6.3% at $7.34 by Friday’s close.
The absence of an update to its buyback on Friday means Boral didn’t buy any shares on Thursday. As of Wednesday, Boral had bought back 72.77 million shares at a cost of $491.7 million.
The lure of the higher price means a possible announcement by Boral about more capital management measures in the new financial year if off the cards.
Seven Group said it won’t raise its bid above $7.30 per share under any circumstances, unless the 34.5% is guaranteed.
Friday’s $7.40 per share offer values Boral at $9.1 billion, easily topping the $8 billion valuation Seven’s May 10 bid had suggested.
