Is Boral (ASX:BLD) preparing for battle?

Is Boral (ASX: BLD) stepping up against Seven West Media Ltd’s (ASX: SWM) take-over bid? Let’s take a look.

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Boral Limited (ASX: BLD) looks to be stepping up its defence of Seven West Media Ltd‘s (ASX: SWM) take-over bid, with investment bank Jarden Australia expected to join the cause. The Boral share price is wobbling today, having spent time in both the red and the green.

At the time of writing, shares in Boral are trading for $6.79, 0.4% higher than yesterday’s closing price.

Let’s take a look at the week that’s been for the building materials group.

Take-over bid

Seven West made a bid for Boral on Monday night, offering to buy all of Boral’s issued shares for $6.50 apiece. That figure would value the building materials company at around $8 billion.  

The offer price is a nil premium on the company’s share price at the time, which closed for $6.50 the previous day.

At the time, The Motley Fool Australia reported the bid was likely an attempt to avoid breaking ‘creep rules’.  Under the Corporations Act, Seven West wasn’t able to increase its 23.2% stake in the building materials company unless it made a takeover offer. Seven West claimed it would have been happy to increase its stake to 30%.

Boral was quick to advise its shareholders to reject Seven West’s bid, announcing that was its preference on Tuesday morning. The offer is expected to open on 25 May at the earliest.

Jarden Australia is expected to be appointed to Boral’s defence through the off-market takeover bid, according to a report in the Australian Financial Review (AFR).

Jarden Australia, alongside Citigroup, was mandated to manage Boral’s on-market buyback in April. The buyback involves it purchasing as many as 122 million of its own shares – around 10% of those on issue – over 12 months.

Boral share price snapshot

Regardless of its dramatic week, the Boral share price has been having a great 2021 on the ASX.

Currently, the Boral share price is up 36% year to date and has gained 164% since this time last year.

The company has a market capitalisation of around $8.2 billion, with approximately 1.2 billion shares outstanding.  

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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned.

The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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