Fletcher Building ups Crane takeover offer

Fletcher Building has revised its hostile takeover offer for Australia's Crane Group, releasing a timetable and increasing the cash offered per share, following talks with ASIC and the target company.

In a statement to stock exchanges on both sides of the Tasman, Fletcher Building said that to comply with regulations, the amount being offered in the takeover had been revised to equate to the $A9.35 per share paid to some institutional shareholders as part of the acquisition of Fletcher Building Australia’s 14.9% pre-bid stake.

The takeover offer is now one Fletcher Building share and $A3.47 cash (an increase of 4Ac per share) for each Crane share, the company said. The bid's implied value of $A9.35 represented a 28% premium to the Crane share price over the month before the offer's announcement, Fletcher Building said.

The bid was conditional on the acquisition of 90% of Crane shares. Fletcher Building intended to operate ASX-listed Crane as a separate division within the larger group.

The offer, being made by Fletcher Building (Australia) - a wholly owned subsidiary of New Zealand's largest listed company Fletcher Building - will open on Wednesday and close on Friday, February 25, unless extended.

In mid-December, Fletcher Building announced plans to buy the listed Australian building products company, in which it had a 14.9% stake, for $A740 million. 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.

Crane directors urged shareholders to reject the original bid, saying it undervalued the Australian the building and plumbing supplies company.

Shares in Fletcher Building (NZX: FBU), which has applied for Commerce Commission clearance for the takeover, were trading at $7.78 at 4pm. 

Crane operates more than 100 trade distribution outlets in New Zealand under the MasterTrade, Mico, Corys Electrical and Equipsafety brands. Crane's Iplex business makes and distributes plastic pipeline systems on both sides of the Tasman.

Fletcher Building, which owns the PlaceMakers distribution business, believed the main area of competition concern was the manufacture and distribution of pipes and pipe fittings