Boral (ASX: BLD) share price lifts as Seven gets increased stake

Despite the board’s request, enough shareholders sold to Seven.

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The Boral Limited (ASX: BLD) share price is now in the green after Seven Group Holdings Ltd (ASX: SVW) confirmed this afternoon that the requisite number of Boral shareholders sold to it so as to reach its desired goal of 34.5% ownership of Boral.

At close of trade today, shares in the construction materials company were selling for $7.39 – up 0.27%.

Let’s take a closer look at the latest updates.

Why the Boral share price is rising

Despite Boral’s board recommending shareholders reject the offer from Seven, it was confirmed that Seven’s ownership of the company increased from about 24.5% to 34.5%. Seven sent an initial offer of $6.50 per Boral share. This was quickly increased to two conditional offers.

  • If it acquired 29.5% of Boral, it would pay $7.30 per share.
  • If it acquired 34.5% of Boral, it would pay $7.40 per share.

Boral’s share price jumped on the news to new 52-week highs. Seven also extended its offer to 15 July to aid its bid.

Today’s news confirms Seven will pay the $7.40 per share. It will not be increasing its offer any further.

While Boral has not said anything about today’s developments, it is safe to assume the board is not pleased about it. When it asked owners to not sell, it said Seven’s bid was “opportunistic” and did not reflect fair value. Enough investors clearly disagreed.

Boral sold its North American building supplies business in an apparent attempt to stave off the sale. Seven later criticised the sale as “rushed” and claimed it was sold for a loss.

Boral share price snapshot

Over the past 12 months, the Boral share price has increased by 96.5%. Its 52-week high of $7.40 is on par with Seven’s offer and only 1 cent above its current market price.

If an investor was savvy enough to buy Boral at its COVID low of $1.79 a share, they would be sitting on an impressive 313% return on investment (ROI).

Given its current valuation, Boral has a market capitalisation of approximately $8.7 billion.

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The Motley Fool Australia’s parent company Motley Fool Holdings Inc. 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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