What’s MM’s view on the bid for CSR?
What are your views on the current takeover offer for CSR? Do you think it is likely to succeed and how do you think it might play out from here? Can you give any idea of the timeframe.
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Answer
Hi Les,
French building company Saint-Gobain has bid $4.3bn/$9 a share for local building company CSR which started the week at $6.79. The bid is non-binding and indicative but it has succeeded in securing due diligence from CSR’s board with its attractive $9 bid, a 33% premium to Tuesdays close – Saint-Gobain (SGO FP) has a market cap of ~$57bn, compared to CSR’s $4bn.
- There remains plenty of water left to go under the bridge, but this does have the “look & feel” of a successful bid with the French company said to have been looking at CSR for 2-years.
- If MM were long CSR (we wish!) we would probably cut half and run half just encase something fell short in the DD.
- NB – the deal will require foreign investment review board (FIRB) approval adding another potential variable.
- Time frame would likely be 6 months + for this to play out.
