Seven criticises Boral report

Seven Group Holdings has launched a vigorous attack on advisory firm Grant Samuel, whose report was used by Boral’s independent directors to oppose Seven’s takeover offer.

“SGH is extremely disappointed there were fundamental errors in the independent expert report in Boral’s target statement,” Seven said today.

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

Seven Group, which is controlled by Kerry Stokes and run by his son Ryan Stokes, is already Boral’s major shareholder with a 73 per cent stake.

It has launched a $1.9 billion offer to move to full ownership of the building materials company.

Boral’s independent directors used Grant Samuel’s report as the basis for recommending minority shareholders reject the takeover offer.

The report valued Boral shares at between $6.50 and $7.13, exceeding Seven’s offer of $6.05 in cash and shares.

In an updated bidder’s statement, Seven said the report should have found its takeover offer was fair and reasonable.

Specific criticisms of the independent expert report included the inclusion of a carbon border adjustment mechanism in one scenario.

Seven said the report included unrealistic price and margin increases for which there were no reasonable grounds.

It added that the report failed to include “critical cost of capital inputs” and failed to consider relevant multiples as part of its valuation.

Boral shares dipped slightly today to $6.03.