© Reuters. FILE PHOTO: The logo of Boral Ltd, Australia’s biggest supplier of construction materials and building products, adorns a wall in the foyer of their Sydney headquarters in Australia, November 21, 2016. REUTERS/David Gray

By Arundhati Dutta

(Reuters) -Australia’s Boral (OTC:) Ltd said it would sell its North American building products business to a unit of NYSE-listed Westlake Chemical (NYSE:) Corp for $2.15 billion, throwing a spanner in the works of a takeover bid by Seven Group.

Boral’s shares rose as much as 4% to A$7.06, their highest since October 2018, after the building and construction materials supplier revealed its deal to sell the U.S.-based business in a disclosure responding to Seven’s bid.

Boral had already asked shareholders to reject an off-market zero premium bid by Seven Group, a conglomerate controlled by Australian media owner Kerry Stokes, saying it undervalued the company.

Seven owns 23.18% of Boral, and made the offer in May after failing to raise its stake to 30% due to regulatory setbacks.

Seven Group said the business had been sold for a loss in a rushed response to their offer.

“Our view is that Boral should have secured more. This business has been outperforming while the Australian business is under-performing,” a Seven spokesperson said in an email.

One analyst said the U.S. deal would not have a great impact on Seven’s takeover attempt.

“Seven Group made a bid that was expected to get turned down to clear the way for them to keep buying more,” said Mathan Somasundaram, CEO at Deep Data Analytics.

“Seven Group’s historical trend in these scenarios suggests that they will get as much as they are allowed and stay there as a blocking stake. When the cycle turns weak, they will move in and take control gradually,” he said.

Boral’s shares have surged more than 30% this year, as monetary and fiscal stimulus helped Australia’s property market rebound from last year’s pandemic lows.

Boral CEO Zlatko Todorcevski said the company expected significant surplus to be returned to shareholders from the sale, with its net debt target falling from A$1.5 billion to A$1.3 billion.

($1 = 1.3330 Australian dollars)

Disclaimer: Fusion Media would like to remind you that the data contained in this website is not necessarily real-time nor accurate. All CFDs (stocks, indexes, futures) and Forex prices are not provided by exchanges but rather by market makers, and so prices may not be accurate and may differ from the actual market price, meaning prices are indicative and not appropriate for trading purposes. Therefore Fusion Media doesn`t bear any responsibility for any trading losses you might incur as a result of using this data.

Fusion Media or anyone involved with Fusion Media will not accept any liability for loss or damage as a result of reliance on the information including data, quotes, charts and buy/sell signals contained within this website. Please be fully informed regarding the risks and costs associated with trading the financial markets, it is one of the riskiest investment forms possible.

Source link


Please enter your comment!
Please enter your name here