Boral (ASX:BLD) share price gains as Seven’s hold surpasses 50%

It’s a fight to the finish line as Seven Group inches closer to winning control of the construction supplies company.

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The Boral Limited (ASX: BLD) share price is climbing as Seven Group Holdings Ltd (ASX: SVW) gets tantalisingly close to winning its battle for control of the construction supplies company.

Right now, the Boral share price is trading at $7.38, 0.41% higher than its previous closing price.

At the same time, shares in Seven Group have boosted 2% higher to trade at $23.31.

While Seven Group doesn’t yet have full voting power, it now holds a majority stake in Boral.

Let’s take a closer look at today’s news in the battle for Boral.

Seven Group’s takeover comes to fruition

The Boral share price is lifting despite Seven Group being only a hair’s breadth away from gaining control of the company.

According to the announcement from Seven Group, it currently holds 52.65% of all of Boral’s outstanding shares.

But, in this case, that doesn’t give it majority voting power as 3.33% of Seven Group’s Boral shares are part of an equity swap transaction.

Therefore, it only holds 49.32% of Boral’s voting power.

As The Motley Fool reported yesterday, if Seven Group’s voting power in Boral surpasses 50%, the takeover bid will be extended for another fortnight.

It’s now a race against time for Seven Group to get a hold of an additional 0.68% of Boral’s outstanding shares before 7pm today when the takeover bid closes.

Seven Group is confident it will secure 50% of Boral’s voting power before the cut off. However, the pressure doesn’t seem to be damaging the Boral share price.

What next?

Seven Group has stated, if it wins control, it plans to retain a majority of independent directors on Boral’s board. In today’s release, it said:

Having a majority of independent directors has been an important feature of SGH’s corporate governance for many years, helping to drive value for the benefit of all SGH shareholders, and it looks forward to following the same approach for Boral.

According to reporting by the Australian Financial Review today, Seven Group will also request a number of changes.

These include creating additional board seats, speeding up Boral’s overhaul of its Australian business, and pushing for increased discipline in the company’s capital management.

The Australian has reported, if Seven Group wins control of Boral, it will instate its CEO Ryan Stokes as Boral’s chair, replacing Kathryn Fagg. Additionally, Seven Group’s chief financial officer Richard Richards will be put back onto Boral’s board.

Boral share price snapshot

This year has been a good one for the Boral share price. It has gained 48% year to date and is 95% higher than it was this time last year.

And Seven Group

Despite pushing higher today, the Seven Group share price is still 2.7% lower than it was at the beginning of 2021.

However, it has gained 32% since this time last year.  

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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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