Boral (ASX:BLD) share price seesaws after rejecting increased bid

The construction company says the latest Seven offer still “significantly” undervalues its shares.

| More on:
Two men and a woman in high vis gear on a Construction site

Image Source: Getty Images

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

The Boral Limited (ASX: BLD) share price fluctuated today after the company recommended shareholders reject Seven Group Holdings Ltd (ASX: SVW)’s bid to increase its stake in the company.

At one point during intraday trade, shares in the construction materials company broke their 52-week record again and hit $7.36. At close of trade, however, its shares ended at $7.34 – flat on Friday’s close.

Let’s take a closer look at today’s news.

Why the Boral share price was in focus today

In a statement to the ASX, Boral recommended its shareholders reject the updated offer from Seven Holdings for up to 34.5% of its company for $7.40 a share. Seven’s initial bid of $6.50 a share was rejected for “undervaluing the company by 40%”.

As a result, Seven made a second bid of $7.30 a share on the proviso it increases its stake in Boral to 29.5%, or $7.40 a share if they obtain 34.5% of the company.

Boral says shareholders should continue to reject this offer from Seven and gave the following reasons.

  • The new price of $7.30 or $7.40 is not guaranteed. If not enough shareholders accept the offer, an investor agrees to sell their shares to Seven Holdings for the original bid of $6.50.
  • Boral says Seven’s latest offer still does not reach fair value. According to the company, the Boral share price is valued between $8.25 and $9.13. Boral believes Seven’s offer should be at this level if it wishes to increase its influence in the company. The construction materials business called Seven’s offer “opportunistic.”
  • Boral claims it is unlocking “significant value” for shareholders in the near term. Its recent sale of its North American business should result in a distribution of around $3.02 per share to shareholders, according to the statement. However, Seven has slammed the deal as a “rushed process” and a bargain price for the buyer.

Seven Holdings has made no comment at this time on Boral’s latest rejection.

Boral share price snapshot

Over the past 12 months, the Boral share price has almost doubled – rising by 94.7% in the period. The last time Boral’s share price was around its current levels was in April 2018, hovering around $7.30.

Boral has a market capitalisation of $8.7 billion.

More on Mergers & Acquisitions

A man stands with his arms crossed in an X shape.to indicate that not everyone is buying ASX mining shares despite the commodities rally
Mergers & Acquisitions

Link share price drops on takeover rejection

Link has rejected a takeover offer from Dye & Durham...

Read more »

Two men shaking hands on a merger.
Mergers & Acquisitions

HRL share price jumps 10% as board backs takeover from ALS

HRL has accepted ALS' takeover offer...

Read more »

A young male investor wearing a white business shirt screams in frustration with his hands grasping his hair after ASX 200 shares fell rapidly today and appear to be heading into a stock market crash
Mergers & Acquisitions

Why is the Carsales share price crashing 15% lower today?

Carsales shares are sinking on Wednesday. Here's why...

Read more »

A little girl with red hair runs excitedly with a rocket strapped to her back, trying to launch.
Mergers & Acquisitions

Guess which small-cap company is soaring 71% on a takeover bid from an ASX 200 share

ALS’ non-binding takeover offer represents a massive premium on HRL’s recent share price.

Read more »

A bearded man holds both arms up diagonally and points with his index fingers to the sky with a thrilled look on his face over these rising Tassal share price
Mergers & Acquisitions

Tassal share price rockets 14% on $1 billion takeover bid

The board of the Tasmanian-based salmon farming company believes the takeover proposal is not in the best interests of shareholders.

Read more »

Business meeting
Mergers & Acquisitions

Link share price pushes higher despite revised takeover offer

Link shares are pushing higher on Monday following a takeover update...

Read more »

Projection of two hands being shaken on a deal.
Mergers & Acquisitions

2022 has seen a record first half for ASX mergers and acquisitions. Here’s the lowdown

Deals have hit new heights in Australia so far this year.

Read more »

Man looking excitedly at ASX share price gains on computer screen against backdrop of streamers
Mergers & Acquisitions

Guess which ASX software share just rocketed 150% on takeover news

PayGroup shares are moving into uncharted territory today.

Read more »