Boral Ltd has rejected an offer from Seven Group Holdings (SGH) saying it is “not fair and not reasonable.” Independent expert firm Grant Samuel & Associates assessed the fair market value of Boral shares to be in the range of AUD6.50-7.13/share, concluding that the offer from SGH of AUD5.96-6.19/share was below this range. SGH currently holds a 72 per cent stake in Boral. The offer, which totalled AUD1.9bn (US$1.25bn) was for the remaining shares in the company.
Commenting on the offer, Boral’s Bid Response Committee (BRC), stated, “We have carefully evaluated the SGH offer and recommend that shareholders should reject the SGH offer as it undervalues Boral. The Independent Expert has concluded that the SGH offer is neither fair nor reasonable, supporting the BRC’s view. Boral management is ahead of schedule in delivering on its ‘Good to Great’ improvement strategy and is only part way through this journey. In addition, Boral has today announced that it has surplus property to which Grant Samuel has attributed a value of AUD1.4bn to AUD1.6bn in its Independent Expert's Report, equivalent to AUD1.26-AUD1.44 per share, which we expect to deliver significant value creation to Boral shareholders in the future.”
The BRC was formed for the purposes of responding to the SGH offer. It is chaired by Rob Sindel as lead independent non-executive director and comprises all Boral directors other than the SGH nominees. The BRC has recommended that Boral shareholders reject the SGH offer as it does not represent appropriate value for minority shareholders.
