Independent directors reject Seven group bid for Boral

Independent directors of building products group Boral have delivered a rare rejection of a takeover by a predator, recommending against the takeover of the company by Seven Group Holdings.

While directors frequently wave through takeovers that deliver immediate profits to shareholders, the Boral Bid Response Committee (BRC) has recommended rejecting the bid from Kerry Stokes-owned Seven to buy the 28 per cent of the company it does not own.

The committee, made up of the three Boral directors independent of Seven, cited an independent report that found the offer not fair and not reasonable.

The BRC said in a statement that Seven’s bid undervalued the company.

The committee said: “Boral management is ahead of schedule in delivering on its ‘good to great’ improvement strategy and is only part way through this journey.

“In addition, Boral has today announced that it has surplus property to which Grant Samuel has attributed a value of $1.4 billion to $1.6 billion in its independent experts report…which we expect to deliver significant value creation to Boral shareholders in the future.”

Building products companies are anticipating a big increase in demand as governments respond to increasing housing shortages – something that has sparked the takeover of Adbri.

Also in February French group Saint-Gobain offered $4.3 billion to take over CSR.

Further reading:
Seven Group makes $1.2bn offer for Boral
Building products group Adbri falls to foreign control

Picture: Boral