Boral shares higher after backing for revised Seven buyout bid

The news: Boral’s bid response committee has agreed to back Seven Group Holdings’ (SGH) buyout bid after the majority shareholder tweaked its offer and raised its holding further.

The numbers: Under the reworked bid, Seven will still offer 0.1116 SGH shares to minority shareholders but will increase the cash component to $1.70 per Boral share, instead of the previous minimum of $1.50 increasing to $1.70 only after 90.6% acceptances.

In addition, eligible Boral shareholders will get 13 cents a share by way of franking credits, taking the ‘relevant value’ of Seven’s offer to $6.16 to $6.39 per Boral share, compared to independent expert Grant Samuel’s estimated valuation of $6.42 to $7.05 per share.

The context: The bid response committee said the independent expert has now updated its assessment of Seven's bid as 'reasonable'. The committee said it also reconsidered its previous rejection of the offer after Seven increased its stake to 78.8% and recently pushed for two additional representatives to Boral's board, which would result in SGH having effective control of decision-making.