The Boral Limited (ASX: BLD) share price has been an interesting one to watch on the S&P/ASX 200 Index (ASX: XJO) today. Boral shares were up as much as 3% this morning, making a new 52-week high of $7.06 a share in the process. But as the trading day has dragged on, Boral shares have lost some of their momentum. The current Boral share price (at the time of writing) is $6.88 a share, up 1.55% for the day.
The big news out of the construction company today is the planned sale of its North American business to a subsidiary of Westlake Chemical Corporation (NYSE: WLK) for US$2.15 billion. However, it’s this announcement that has also sparked some ASX drama today.
Boral has been locked in a tussle with Seven Group Holdings Ltd (ASX: SVW). Seven has been eyeing off Boral for a while now. Just last week, the company extended its takeover offer of $6.50 a share to 30 June. That was despite Boral already advising its shareholders to reject the offer, saying it was opportunistic and undervalued the company by as much as 40%. Seven still owns a rough 24% stake in the company, making it Boral’s largest shareholder.
Boral share price anything but boring today
And that is the source of the drama we are seeing today. According to a report in The Australian this morning, Seven has slammed Boral for the North American deal with Westlake. Here’s some of what a Seven Group spokesperson told The Australian:
The US building products business has been sold for a loss. This business has beenoutperforming while the Australian business is underperforming. This seems like a rushed saleprocess in response to our offer. Our view is that Boral should have secured more…
The latter comment is presumably in reference to a concurrent announcement from Boral this morning. This announcement guarantees that neither its CEO Zlatko Todorcevski, and CFO, Tino La Spina will be removed from their positions “without cause” until July 2022. If the company does show its CEO or CFO the door, it will have to pay them their entitled bonuses up to July 2023.
Whether this development is the last chapter in the Boral/Seven saga remains to be seen. We will have to wait until perhaps 30 June to see what Seven’s next move might be when it comes to Boral. At the current Boral share price, the company has a market capitalisation of 48.14 billion.
The post Why Seven (ASX:SVW) has slammed the Boral deal today appeared first on The Motley Fool Australia.
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Motley Fool contributor Sebastian Bowen 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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