CSR share price jumps again as blockbuster bid confirmed

Investors are excited about a potential takeover.

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The CSR Ltd (ASX: CSR) share price has risen 5% at the time of writing after the company confirmed it had received a large takeover bid after the rumours of interest were reported yesterday.

Takeover offer confirmed

CSR noted the media speculation about interest from Saint-Gobain about acquiring the ASX building products business.

The offer is a conditional, non-binding, indicative proposal from the large French business.

How big is the offer? It's $9 per share, which is 7.8% higher than the current CSR share price and 25% higher than a week ago.

Under the offer, CSR would be entitled to pay a final dividend of up to 25 cents per share for its financial year ending 31 March 2024, which would be deducted from the cash offer price.

As mentioned, the offer is still subject to a number of conditions including satisfactory due diligence, unanimous recommendation from the CSR board to vote in favour of the proposed transaction, regulatory approvals and CSR shareholder approval.

This large offer from Saint-Gobain came after an earlier indicative offer and a period of negotiation. After having reviewed the proposal, CSR's board unanimously resolved to pursue the proposal. CSR is currently providing Saint-Gobain with confirmatory due diligence so that it can put forward a binding offer at an agreed CSR share price of $9.

No certainty of a deal

The CSR board noted that there is no certainty that the proposal will result in a binding offer and it will keep the market informed as necessary.

The board also noted shareholders don't need to take any action about this proposal at this time.

What next?

Due diligence can sometimes take a number of weeks, so it could take a while before anything concrete happens.

Even if an offer is binding, it can require months for all of the different steps to occur. The CSR share price has risen by 44% in the last six months, so shareholders have seen a big rise in the value of their shares.

Motley Fool contributor Tristan Harrison 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 Scott Phillips.

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