Boral recommends shareholders reject Seven Group Holdings Limited off-market takeover offer

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SGH announced a $6.501 cash per share off-market takeover offer for all of the ordinary shares it does not own in Boral. The Offer will be made by Network Investment Holdings Pty Limited, a wholly owned subsidiary of SGH.

Boral has today recommended shareholders reject the $6.50 SGH offer.

“Boral Ltd (“Company”) notes yesterday’s lodgement with ASIC of an off market offer from Seven Group Holdings (“SGH”) to acquire 100% of Boral for total cash consideration of $6.50 per share – a nil premium to last close (“the Offer”).”

“The Offer is conditional upon no material adverse change in relation to Boral or the S&P/ASX 200 index and the receipt of consent from the majority of lenders under SGH’s corporate loan facility in addition to other customary conditions. The earliest that the Offer is expected to be open for Boral shareholders is 25 May 2021.” ASX Announcement.

SGH provided the following summary of the Offer:

“The consideration under the Offer of $6.50 per Boral share (“Offer Price”) is based on the last closing price of

Boral shares on ASX at the close of trading today, 10 May 2021.

The Offer Price represents a premium of:

  • 54 cents to the average purchase price of interests in Boral shares acquired pursuant to SGH’s recent “creep” transaction on 8 April 2021, being $5.96 per Boral share;
  • 18% to the last closing price of Boral shares on ASX on 31 March 2021 of $5.49, being the trading day prior to the announcement of Boral’s current on-market share buy-back on 1 April 2021; and
  • 22% to the Boral six month VWAP, being $5.32 per Boral share.

The Offer provides investors with an opportunity to divest as much of their shareholding in Boral as deemed appropriate, in an orderly manner and without the need to pay brokerage fees, and with the opportunity to receive certain value.The Offer is not subject to any minimum acceptance condition. The Offer is conditional upon: no material adverse change in relation to Boral or the S&P/ASX 200 index; the receipt of consent of the required majority of existing SGH lenders; no regulatory action and customary no prescribed occurrences in relation to Boral. The Offer conditions are set out in full in the Appendix to this announcement.

The Offer is expected to open on 25 May 2021 and close on 25 June 2021, unless extended (although this is subject to change).” ASX Announcement.

In a statement from Boral, the company “has formed a committee of its directors, excluding Mr Ryan Stokes, to consider the Offer. This committee believes the Offer is opportunistic, undervalues the Company and unanimously recommends that shareholders REJECT the Offer once it opens by TAKING NO ACTION. Boral management remain committed to the Company’s strategic goals including the transformation targets set across the Group and the ongoing process in relation to its North American portfolio,” statement.