What happened today?
Boral released its target statement in response to the off-market takeover bid by Seven of $6.50 per share.
The Boral independent board committee unanimously recommended that shareholders reject the Seven offer.
This Boral board committee appointed Grant Samuel & Associates as the independent expert to give an opinion about whether the offer is fair and reasonable to Boral shareholders not associated with Seven.
That independent expert has concluded that the Seven offer is neither fair nor reasonable and is below the independent expert’s estimated fair market value of $8.25 to $9.13 per Boral share.
Other reasons for the rejection
Boral’s board believes that the company’s strategy is expected to unlock significant value in the near-term from potential divestments from assets, notably in North America. The strategy is also aimed at driving value creation and earnings growth, including through its transformation program.
Another reason for the rejection was that the offer is opportunistic and appears to be timed to take advantage of an improving outlook for Boral.
The final reason for the rejection is that Seven is attempting to increase its influence over Boral without paying fair value for it. The offer is at a nil premium immediately before the Seven offer and at a discount to the Boral share price as at 7 June 2021.
Boral Chair Kathryn Fagg said:
“Our core focus is to deliver value to all Boral shareholders and we want all Boral shareholders to benefit from the future value we believe is available through Boral. We believe that any proposal to acquire control of Boral should be at fair value.
Summary thoughts on Boral and the share price
Boral seems to be doing the right to get the business on the right track. I can see why the board don’t want to accept the offer considering the US is now going through an accelerating recovery.
But, there are other ASX growth shares that might be able to produce stronger returns over time.