SYDNEY, AAP – Boral has encouraged shareholders to reject Seven Group’s $8 billion takeover offer, saying the bid undervalues its target.
Boral on Tuesday said the off-market bid of $6.50 per share was opportunistic and offered no premium on the closing price of shares on Monday ($6.50).
Kerry Stokes’ Seven owns 23 per cent of the building materials supplier and said the premium was 54 cents.
This was based on a price of $5.96 per share, which was the average paid for shares after Seven increased its stake on April 8.
Seven made its latest bid off the market due to takeover rules preventing it buying more shares at this time.
Building materials providers such as Boral are well-placed to benefit from major economies recovering from the coronavirus pandemic.
A Boral committee, which did not include Mr Stokes’ son and Boral director Ryan, unanimously recommended shareholders refuse the offer.
Seven said it would be satisfied if it gained 30 per cent ownership.
The offer will be put to Boral shareholders from May 25.
Seven is an investment group and a different entity to Seven West Media, which runs the TV network.
In addition to its stake in Boral, Seven Group owns Beach Energy, equipment hirer Coates Hire and mining vehicles provider WesTrac.
Shares in Boral were higher by two per cent to $6.63 at 1324 AEST.
Shares in Seven were lower by 2.51 per cent to $20.62.