Boral backs in SGH rejection recommendation

Takeover target Boral has doubled down on its recommendation to reject Seven Group Holdings' takeover offer, as the value range gets a trim.

Building materials company Boral is continuing to recommend shareholders reject Ryan Stokes-led SGH’s $1.9 billion takeover offer to acquire the shares it doesn’t already own.

Boral told the market today its independent expert, Grant Samuel & Associates, had trimmed its estimated fair market range by 8 cents, while sticking by its conclusion the $1.9 billion offer was not fair nor reasonable. 

A month after the takeover offer was made, Boral released a report by Grant Samuel & Associates alongside its target statement recommending shareholders reject the offer.

The report concluded the offer was not fair or reasonable and was below what it deemed a fair market value.

Grant Samuel’s assessed value of the SGH offer was $5.96 to $6.19 per Boral share, but it estimated a fair market value would be in the range of $6.50 to $7.13 per share, at the time. 

In today’s ASX statement, the firm amended its value range for Boral to $6.42 to $7.05 per share, a haircut of 8 cents.

Last month, SGH then launched an attack in response to the report, saying it was “extremely disappointed” and that there were “fundamental errors” in the report.

It added that Grant Samuel’s independent expert report was “unbalanced, selective and risks fundamentally misleading Boral minority shareholders”.

Today, Boral told the market it asked Grant Samuel to consider the matters raised by SGH, and that after consideration the firm stood by its conclusion that the offer was not fair and not reasonable.

Boral said given Grant Smauel’s unchanged conclusion, it continued to recommend shareholders reject the bid.

The target said the primary reason the offer was not reasonable was that it doesn’t provide a sufficient premium on Boral’s pre-offer trading price of about $5.80-$5.85.