In key news on Australian stocks, Seven Group Holdings Limited (AU:SVW) has finally won the support of Boral Limited (AU:BLD) on its takeover deal worth up to AU$1.5 billion after a lengthy tussle for months. Boral suggested its shareholders accept the takeover offer after Seven Group increased the cash part of the deal. It also stated that the independent expert Grant Samuel has deemed Seven Group’s revised offer to be reasonable now.
Seven Group shares are trading up by 0.87%, while Boral gained 2.6% today as of writing.
Seven Group is a diversified investment entity with businesses across sectors like energy, media, industrial services, and manufacturing. Meanwhile, Boral is an Australian manufacturing company for construction materials.
The Seven-Boral Deal’s Backdrop
In February, Seven offered a deal for the complete takeover of Boral by acquiring the remaining 28.4%. The offer value included 0.1116 Seven Group shares and $1.50 cash for each Boral share. However, later in March, Boral rejected the offer, calling it “not fair and reasonable.”
Since its February attempt to gain full control, Seven Group has increased its stake in Boral from 71.6% to 78.8%.
Seven Group’s New Offer
The new deal includes 0.1116 Seven Group shares and higher cash offer of AU$1.70 per share. Seven also plans to distribute a fully franked dividend of $0.30 per share to all existing and new shareholders upon the completion of the offer.
Additionally, Boral announced two initiatives, including an on-market buyback of up to 5% of Boral’s shares and a fully franked AU$0.26 dividend per share. The cash part of AU$1.70 might be reduced to AU$1.44 due to a $0.26 dividend from Boral as per the offer terms.
What is the Share Price Prediction for Seven Group?
According to TipRanks, SVW stock has a Moderate Buy rating, backed by three Buys, three Holds, and one Sell recommendation. The Seven Group share price target is AU$39.22, which is 3% below the current trading level.
