Boral Ltd (ASX: BLD) shares are surging to a new 52-week high today following a variation in the takeover bid from Seven Group Holdings Ltd (ASX: SVW). At the time of writing, the Boral share price is trading 6.38% higher at $7.34.
Let’s take look at the latest takeover news.
Seven Group revises offer pending acceptances
Boral shares are having a bumper end to the week after Seven Group today revised its all cash offer to take over the company. In an ASX announcement around midday, Seven advised it is increasing its buy offer from $6.50 per share to $7.30 per share providing it secures acceptance to increase its stake in Boral to 29.5% by 2 July.
Seven Group also laid out a second offering to a ceiling of $7.40 per share if it secures the necessary acceptances to increase its stake to 34.5% by 7 July.
Despite spending a decent portion of the morning trading in the red, Boral shares have rallied to their current level since the announcement was released.
Earlier moves in review
It was only Tuesday this week when Seven Group made further changes to some key tension points in its $8 billion offer for Boral. In that update, the conglomerate made its offer unconditional in an effort to increase the deal’s attractiveness for current Boral shareholders.
However, Boral management counter-argued that Boral shareholders should reject Seven Group’s offer of $6.50 per share on the basis it undervalued the company.
On Monday this week, Boral also divested its US building products segment in a transaction worth around $3.6 billion. Boral chair Kathryn Flagg stated at the time:
The sale is expected to generate sufficient surplus capital once the transaction closes. Based on Boral’s financial framework, we estimate this surplus (prior to any reinvestment alternatives) to be ~$3.6 billion which equates to $3.02 per share.
Boral also advised in the footnotes of its US divestiture update that, in addition to the $3.6 billion in estimated surplus, the company also expects proceeds of around $167 million following the divestment of Meridian Brick. This is set to close in the first quarter of FY22.
The market has continued to digest these moves over the past few days, driving the Boral share price around 8% higher for the week.
Boral share price snapshot
Including today’s gains, the Boral share price is up by around 48% year to date. It has also rallied by around 100% over the past 12 months. At its current share price, Boral has a market capitalisation of around $8.7 billion and trades at a price-to-earnings ratio (P/E) of around 45.
Boral paid its last dividend of 9.5 cents to shareholders in April 2020, which was 50% franked, but opted to withhold the interim dividend in the first half of FY21.