Boral (BLD) Shares outperform on sale of U.S. business
BLD +0.29%: a small move higher, however it comes against the backdrop of a 100+pt fall in the broader index today. The building products company announced it has agreed to sell it’s North American business to Westlake (WLK.NYSE) for the sum of $AU2.9b. The sale comes around 12 months after Boral found widespread manipulation of financial performance in the US arm leading to a number of departures and a write down of assets.
Boral has been a great beneficiary of the global stimulus measures leading to a flood of construction across residential, commercial and infrastructure. They have also had some interest out of Kerry Stokes’ Seven Group (SVW.ASX) which has been creeping up the substantial holder list before making an offer at $6.50/sh. Today’s announcement said an independent review into the company saw value up to $9.13/sh, however the value attributed to the North American business was only as high as $A2.7b. Seven Group look to be playing ball at the moment and perhaps this sale will lead to a more attractive offer. Boral has indicated a large portion of the sale will be returned to shareholders, with a decision on the best method will be made upon settlement.
