Seven Group takeover goal for Boral likely to be unsuccessful: analysts
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The news: Seven Group Holdings will not increase its takeover bid for Boral, having seen its "best and final" offer to buy out the remaining stake in the construction materials supplier rejected on Tuesday, Bell Potter analysts believe.
The numbers: Bell Potter analysts said that Seven, which currently holds around 72.6% controlling interest in Boral, will not buy additional shares for more than $6.25 per share for at least 12 months following the close of its rejected offer.
Kerry Stokes-controlled Seven had offered to acquire all the remaining shares at a maximum of 0.1116 Seven shares and $1.70 cash, valuing the company at $6.19 a share.
Financial advisory firm Bell Potter made no changes to its earnings per share estimates for Boral, but upgraded its target price from $6.24 per share to $6.75 per share to reflect a greater evaluation of the company's surplus property portfolio.
Boral and Seven were both down in early trading on the ASX, with Boral 1.58% lower to $6.23 and Seven 0.58% lower to $41.35 by 11:30am AEDT.
The context: Boral's bid response committee on Tuesday recommended shareholders reject Seven's offer by taking no action, after an independent expert concluded it was "neither fair nor reasonable".
Bell Potter said that the prospect of a Seven offer successfully completing is now "unlikely", following Boral's response.
The source: Bell Potter research report
