The recent upward pressure on Boral shares dissipated Thursday as they slid 3.6% to $6.90 and turnover eased back to around 3.53 million (taking the total so far this year to more than 48 million).
Shares in the building giant, the target of a cheap takeover offer from Kerry Stokes’ Seven Group Holdings, surged on Wednesday to the highest the shares have been since 2018. The 4.5% jump came on turnover of more than 16 million shares. That saw the shares leap from around $6.87 to close at $7.16, just off their intraday high of $7.18.
A notice to the ASX on Thursday morning revealed that Boral itself was very active in the market on Wednesday, buying back more than 8.8 million of the 16 million plus traded. That took the total purchased so far to 72.777 million. The filing said that had cost a total of $491.73 million.
The filing said that 49,794,426 shares remained to be bought back under the current scheme.
Seven Group’s $6.50 a share nil-premium offer is now so far out of the money it isn’t funny. The bid closes next Wednesday at 5pm and is free of conditions.
Some analysts think that Boral will shortly reveal the structure of capital management moves (such as a one-off special dividend as Rio Tinto and BHP did several years ago after selling assets) to be revealed with the full year results in August.
The capital return will help Seven pay for some of the cost of assembling its 24% stake. Seven Group looks like ending up with close to 27% of Boral when the buyback ends.
The non-Stokes members of the Boral board and the company’s management seem intent on forcing Seven to lift its bid to make sure there is a premium for a change of control. But that looks likely not to happen.