- Seven Group Holdings, led by the Stokes family, plans to take full control of Boral, a major building products company.
- They’re offering up to $6.25 per share to buy the remaining Boral shares, aiming for greater efficiency and control.
- Boral shareholders are advised to wait for the independent directors’ recommendation before taking any action.
Seven Group Holdings (ASX: SGH) is making a big move to take full control of Boral (ASX: BLD), a major player in the building products industry.
Seven Group, owned by the Stokes family from Western Australia, already owns most of Boral, about 71.6%, since they started getting interested in the company back in 2020.
They’re offering to buy the rest of Boral’s shares for up to $6.25 each. This could make the whole deal worth around $6.89 billion, depending on how Seven Group’s share price changes.
But Boral is saying, “Hold on!” They’re telling their shareholders not to do anything until a group of independent directors gives their opinion on the offer.
Seven Group is sweetening the deal by saying they might pay more if they get more of Boral’s shares. They’re offering a mix of cash and shares worth at least $6.05 per Boral share.
If they manage to get most of Boral’s shares or if Boral’s board really likes the offer, Seven Group might increase the cash part by 10 cents per share. And if they can buy up almost all of Boral’s shares, they’ll add another 10 cents per share on top, making it $6.25 per share.
Ryan Stokes, the CEO of Seven Group Holdings, thinks this deal makes a lot of sense. He says it’ll help bring Boral into Seven Group’s collection of businesses, making it even stronger. He also promises that Boral shareholders will get a piece of Seven Group and keep benefiting from the improvements happening at Boral.
In Ryan Stokes’ words, “This is a great chance to bring Boral into our family of businesses. It’ll help us all grow even more.”
Seven Group already owns other big companies like Coates, which rents out equipment, and WesTrac, which sells equipment from Caterpillar. They also have a big stake in Beach Energy and Seven West Media, among others.
But Seven Group is clear that they won’t pay more than $6.25 per share for Boral. They think owning Boral completely and taking it off the stock exchange will be more efficient and save money.
Plus, they say it’ll save Boral about $3 million every year in costs related to being listed on the stock exchange.
Boral has been doing well lately, especially with all the construction going on. In the last six months of last year, they made 51% more profit than before, bringing in $314 million. Their revenue also went up by 9.4% to $1.84 billion because prices for their products were higher and they were selling more.
Seven Group says this deal will let Boral’s shareholders keep being part of Boral’s success while also getting a stake in Seven Group. And if things go well, they’ll get to be part of a bunch of other great businesses too.
When this news came out, Boral’s shares went up by 3% to $6.03, while Seven Group Holdings’ shares went down a bit to $40.09.
