Fletcher Building reveals Crane bid costs
Some $A55 million will be incurred in transaction, staff entitlement and interest costs if the takeover succeeds.
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Fletcher Building's bid for Australia's Crane Group will incur a total of $A55 million in up-front costs, made up of:
• $A11 million for the transaction;
•$A16 million for employee rights triggered by any change in control of Crane; and
• $A28 million in extra interest each year from the debt taken on to fund the deal, assuming an interest rate of 7.75%.
These are some of the figures disclosed in the bidder's statement Fletcher Building filed today for its previously announced $A740 million bid for the Australian plumbing and building supplies firm. Crane is rejecting the offer but must now prepare a formal target statement.
Fletcher Building has not done due diligence on Crane and is using publicly available information for its analysis of the bid's benefits. The statement does not put a number of potential synergy benefits because of this.
Fletcher Building may offer to pay a commission to brokers who solicit acceptances of the offer from their clients, but it has not made a final decision yet.
If Fletcher Building is successful the gearing ratio of the combined group will be 33.1%.
"This will leave Fletcher Building's balance sheet in a strong position and enable Fletcher Building to maintain prudent headroom given the remaining uncertainty in financial markets and will also preserve capacity for Fletcher Building to pursue further organic growth and acquisition opportunities which meet its investment criteria," the bidder's statement said.
Fletcher Building currently holds 14.9% of which 13.1% were acquired from Crane's four largest institutional shareholders immediately before the announcement of the bid for $A9.35 cash, the same amount as implied by the offer.
NZPA
Wed, 22 Dec 2010
Wed, 22 Dec 2010
© All content copyright NBR. Do not reproduce in any form without permission, even if you have a paid subscription.
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Fletcher Building reveals Crane bid costs
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