Seven Group Holdings Ltd (ASX: SVW) shares are on the rise today after the company extended its takeover offer for construction materials company Boral Limited (ASX: BLD).
At the time of writing, the Seven Group share price is trading at $21.76, 3.47% higher than yesterday’s close.
Meanwhile, the Boral share price is also trending higher – up 0.59% to $6.77.
For comparison, the S&P/ASX 200 Index (ASX: XJO) is in the green as well, gaining 0.57% for the day so far.
In an announcement to the ASX after Thursday’s close, Seven Group, a diversified investment company, has pushed the final date its takeover offer will close back by 5 days to 30 June.
Takeover bid extended
Originally, Seven’s takeover offer was to end on 25 June, but now Boral shareholders will have an extra 5 days to accept Seven Group’s offer of $6.50 per Boral share.
The offer represented a nil premium on the previous closing price of Boral shares. Now, it’s an almost 4% discount to the current Boral share price.
On receiving the offer, Boral quickly advised its shareholders to reject it, saying it undervalued the company.
Boral released its target’s statement last week. Within it, Boral stated that Seven Group’s bid was opportunistic and might have valued the company at 40.5% less than its true worth.
According to Boral, Seven Group was attempting to get a hold of Boral shares before the construction materials company began its strategy to increase its earnings before interest and tax (EBIT) by $300 million.
Seven Group currently holds around 23% of all Boral shares. As The Motley Fool reported at the time Seven Group’s takeover offer was placed, the bid was likely an attempt to evade “creep rules”. In this case, “creep rules” meant Seven Group couldn’t increase its stake in Boral above a certain point without issuing a takeover bid.
Seven Group claims it would be happy to walk away from the takeover offer with a 30% stake in Boral.
Boral share price snapshot
The Boral share price is having a great 2021 on the ASX.
Right now, it’s up by around 37% year to date. It has also gained almost 84% over the last 12 months.
Seven Group share price snapshot
The Seven Group share price needs all the good news it can get, and now we’ll have to wait an extra 5 days to potentially hear of it.
Seven Group shares have fallen by around 7% since the start of this year. However, they’ve gained 23% since this time last year.
The post Seven Group (ASX:SVW) shares jump as Boral takeover offer extended appeared first on The Motley Fool Australia.
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- Boral (ASX:BLD) states Seven’s takeover bid could undervalue it by 40%
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Motley Fool contributor Brooke Cooper has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.
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