The Boral Limited (ASX: BLD) share price is under the spotlight today because of potential takeover action.
What’s going on for the Boral share price?
Yesterday, it was revealed that Seven Group Holdings Ltd (ASX: SVW) had made a $6.50 cash per share off-market takeover offer for all of the shares it doesn’t already own.
Seven Group already has a 23.18% interest in Boral. Given that Seven’s interest exceeds 20% and that it has recently utilised its ‘creep’ capacity by acquiring an additional 3% interest. It’s restricted from buying any more shares on the market, so it has made this takeover offer.
Seven would happy to increase its holding to around 30% as a result of this offer.
Boral pointed out this was a 54 cents premium to the average purchase price after the recent creep transaction on 8 April 2021, being $5.96 per share.
Offer rejected
This morning, Boral responded to the off market offer from Seven Group.
Boral noted that the offer is conditional on no material adverse change for Boral or the ASX 200 (ASX: XJO), as well as the receipt of consent from the majority of lenders of Seven Group’s corporate loan facility as well as other normal conditions.
The construction business has formed a committee of its directors, excluding Mr Ryan Stokes, to consider the offer.
Boral’s committee believes the offer is opportunistic, undervalues the company and unanimously recommends that shareholders reject the offer once it opens by taking no action.
Management said that they remain committed to the company’s strategic goals including the transformation targets set across the group and the ongoing process in relation to its North American portfolio.
Summary thoughts about the Boral share price
The Boral share price has risen 31% this year and 134% over the last year. It’s not quite back to its former heights, but it does have more recovery potential in the US.
Seven Group clearly thinks that the Boral share price represents good value at around this level.
However, there are ASX growth shares that I think may have more earnings growth potential.
