Boral (ASX:BLD) share price slips as Seven Group’s stake surpasses 40%

Seven Group’s $7.40 per share offer seems to have been too good for many Boral shareholders to refuse.

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The Boral Limited (ASX: BLD) share price is in the red today as the stake Seven Group Holdings Ltd (ASX: SVW) has in the company surpasses 40%.

Right now, the Boral share price is trading at $7.39. That makes it 0.14% lower than its previous close and 1 cent less than what Seven Group is currently paying for the building product company’s shares.

Let’s take a look at the latest news on Seven’s takeover bid.

Quick refresher

In May, Seven Group lobbed a takeover bid for Boral, offering $6.50 per share – a nil premium on the Boral share price’s previous close. Boral quickly rejected the offer, urging its shareholders not to take it up.

At the time, The Motley Fool reported the bid was likely an attempt to evade ‘creep rules’ that inhibited Seven from increasing its 23.2% stake in Boral without placing a takeover bid. Seven claimed it would be happy to increase its stake to 30%.

After increasing its bid a number of times, Seven offered Boral shareholders $7.40 for each share they would part with, conditional upon it receiving at least a 34.5% stake in Boral.

$7.40 is in line with the Boral share price’s 52-week high and the highest it’s been since 2018.

The latest news on Seven’s takeover bid for Boral

On Tuesday this week, Seven Group’s hold in Boral surpassed 34.5%.

And it seems that some Boral shareholders were waiting anxiously for it to do so.

Today, it was confirmed that Seven Group now has a 40.95% hold in Boral, having convinced the owners of around 26.1 million shares to part ways with the company.

According to reporting by the Financial Review, Seven Group CEO and Boral board member Ryan Stokes will be asking for at least 1 more seat on Boral’s board following the takeover bid.

However, the $7.40 Seven is paying is significantly less than the $9.13 Boral’s appointed independent expert found its share price should be.

But it seems many Boral shareholders appear unwilling to wait for its share price to gain the extra $1.74.   

The takeover bid officially closes on 15 July and investors will likely be keeping an eye on Seven’s potentially increasing holding until then.

Boral share price snapshot

Despite today’s lacklustre performance, the Boral share price has been gaining this year.

It’s currently up by around 49% year to date. It has also gained more than 100% over the last 12 months.

The company has a market capitalisation of around $8.5 billion, with approximately 1.1 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’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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