Reject Fletcher's ‘unsolicited and inadequate’ takeover - target company
Shareholders in Australian building and plumbing supplies company Crane Group have been advised to reject a revised hostile takeover offer for the business.
Shareholders in Australian building and plumbing supplies company Crane Group have been advised to reject a revised hostile takeover offer for the business.
Fletcher Building yesterday revised its hostile takeover offer for Crane, releasing a timetable and increasing the cash offered per share.
Following this, Crane chairman Leo Tutt wrote to his shareholders saying Fletcher's bid to buy the 75.1% of the company it did not already own was “opportunistic” and undervalued Crane shares.
He urged shareholders to reject the offer from New Zealand's largest listed company, arguing:
- the offer price would be reduced by the amount of any dividend declared or paid by Crane Group, including the 2011 interim dividend expected to be announced shortly
- the offer price undervalued Crane Group shares
- the timing of the offer was opportunistic—given Crane Group’s growth prospects and the expected recovery in the housing industry
- that Fletcher Building was not paying for the substantial synergies and strategic value that Crane Group could deliver
- that acceptance of the offer would adversely affect shareholders access to franked dividends, and
- that the offer was highly conditional, uncertain and not final.
Releasing the original offer in December, Fletcher Building chief executive Jonathan Ling said, “We believe this is an attractive offer for Crane shareholders as it provides an upfront premium as well as the opportunity to become a shareholder in a significantly larger company”.
Shares in Fletcher Building (NZX: FBU), which has applied for Commerce Commission clearance for the takeover, last traded at $7.78.
NBR staff
Tue, 11 Jan 2011
Tue, 11 Jan 2011
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Reject Fletcher's ‘unsolicited and inadequate’ takeover - target company
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