• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer

Fat Tail Daily

Investment Ideas From the Edge of the Bell Curve

  • Menu
    • Commodities
      • Resources and Mining
      • Copper
      • Gold
      • Iron Ore
      • Lithium
      • Silver
      • Graphite
      • Rare Earths
    • Technology
      • AI
      • Bitcoin
      • Cryptocurrency
      • Energy
      • Financial Technology
      • Bio Technology
    • Market Analysis
      • Latest ASX News
      • Dividend Shares
      • ETFs
      • Stocks and Bonds
    • Macro
      • Australian Economy
      • Central Banks
      • World Markets
    • Small Caps
    • More
      • Investment Guides
      • Premium Research
      • Editors
      • About
      • Contact Us
  • Latest
  • Fat Tail Series
  • About Us
Macro Australian Economy

Seven Group Seeks Full Control of Boral [ASX:BLD] in Strategic Bid

Like 0

By Charlie Ormond, Monday, 19 February 2024

Seven Group lobbed a bid for the remainder of Boral in a deal described as its best and final offer that values the company at $6.9 billion.

Seven Group, led by billionaire Kerry Stokes and his family, has launched a bid to acquire the remaining 28.4% of Boral [ASX:BLD].

Boral operates over 300 industrial sites nationwide, producing concrete, cement, asphalt, and quarrying stone. They also recycle construction and demolition waste.

The move aims to bring the building materials company under complete control of the diversified industrial group Seven.

The offer involves a combination of cash and scrip, with an initial price of $6.05 per share. This could potentially increase to $6.25 depending on the number of minority shareholders who accept the offer.

Shares in Boral are up by 4.72%, trading at $6.11 per share as investors hope to skim a premium from the offer.

Boral’s shares are up by 58.8% in the past 12 months as it successfully turned from significant losses during the pandemic to a ‘home focus’.

This involved Boral selling off its $4 billion American assets to focus on its Australian construction roots.

So what would the deal mean for the company moving forward?

ASX:BLD Boral

Source: TradingView

Simplifying the portfolio

Seven Group, which already owns 71.6% of Boral, believes that fully integrating the company aligns with its strategic vision.

Ryan Stokes, chairman of both Boral and Seven Group, described the offer as ‘a natural evolution’ and emphasised its finality.

The deal was firmly offered as a ‘best and final‘ bid, with no chance of a higher offer.

The bid involves a $6.05 per share price, potentially increasing to $6.25 based on acceptance levels.

The structure combines cash and Seven Group shares (scrip). The reasoning behind the offer is to simplify Seven Group’s portfolio and fully integrate Boral’s operations.

Seven Group is owned mainly by The Stokes family, which holds approximately 57% of the industrial group.

Seven owns significant chunks of Seven West Media, Westrac, Coates Hire, and Beach Energy [ASX:BPT] .

Analysts at Evans and Partners said the acquisition came as a ‘surprise’ given the group’s decision last year to sell a 1% stake at $4.90 after it claimed the company had reached full value.

In a note, Evans’ analysts said:

‘Despite the short-term dilution to our [earnings per share] forecasts, we suspect the move reflects management’s view that the upside to Boral’s earnings is much more than the market has assumed.’

Boral’s board committee is reviewing the offer, and shareholders are advised to wait for further information before making any decisions.

If the offer falls through, Seven will seek to delist Boral and change its board to favourable members who would pursue a capital management approach that aligns with them, seven said.

Earlier this month, Boral upgraded its FY24 underlying earnings forecast to $330–350 million and pleased investors with a 51.8% increase in EBITDA for 1H24.

Outlook for Boral

The offer values the remaining Boral stake at around $1.9 billion. An independent expert will assess the fairness of the offer for Boral shareholders, but on first pass, the deal looks fair.

However, the potential impact on Boral’s dividend payout remains a point of discussion.

Investors will be carefully watching Boral’s independent board committee, which will carefully evaluate the offer.

For now, shareholders have been told to take no action and await a response around mid-March.

For Boral, it seems the inflationary pains that afflicted them post-pandemic have subsided.

Cost pressures that had previously outstripped price trends have now reversed to benefit the company.

ASX:BLD Boral cost chart

Source: Boral Investor Presentation 09/02/24

For the second half of this financial year, the company said it expects volumes to remain largely unchanged.

Therefore, Boral will focus on ‘maintaining [ing] strong discipline on price and cost‘. Moving into an eventual falling interest rate environment should also be positive for building material demands.

Lower interest rates will also help the company’s debts, although much of this hangs on the books as US bond notes.

The company has made good progress in reducing its debt in the past 12 months, with its gearing ratio dropping from 14.3% to 3.8% from June to December 2023.

Overall, the company’s simplification strategy seems to be paying dividends for a company that has returned to its roots.

Golden opportunity

It’s not just large building companies that will benefit from a falling interest rate environment.

As interest rates inevitably come down this year, bonds and other investments become less appealing to investors— but then what wins? Gold.

When bonds lose their favour in the markets, the thing that naturally rises in their stead is the world’s oldest currency.

But it’s not just bonds that shift the tide to gold; unemployment levels are rising worldwide.

When economies are under pressure and jobs are thinning, Central Banks cut interest rates to spur action.

But before that point, gold takes off as people search for safety.

That’s where we think we’re headed.

But before we get there, we have found an incredible window into some of Australia’s best gold mining stocks.

To find out more and learn how you can get access to this free online event, click here.

Make sure you don’t miss this golden opportunity.

Regards,

Charlie Ormond

For Fat Tail Daily

All advice is general advice and has not taken into account your personal circumstances.

Please seek independent financial advice regarding your own situation, or if in doubt about the suitability of an investment.

Charlie Ormond

With more than a decade of fintech experience, including stretches in critical roles at budding start-ups and tech titans like Microsoft, Charles is squarely focused on investment opportunities in emerging sectors. Interestingly, his academic foundation in zoology provides an unexpected edge! He applies his scientific training with his analytical mindset to figure out tomorrow’s winners and losers. While traditional institutions stick with ‘safe’ stocks, Charles goes straight for seismic shifts in crypto and AI. He’s an early adopter of both technologies.

Now he’s on a mission to empower everyday investors. He decodes groundbreaking developments in technology stocks before they grab mainstream attention. So, if you seek an unconventional perspective to help capitalise on what’s next in fintech, look no further.

Charlie’s Premium Subscriptions

Publication logo
Alpha Tech Trader
Publication logo
James Altucher’s Early-Stage Crypto Investor Australia

Latest Articles

  • Ignore the bores and the bears: some shares are going gangbusters
    By Callum Newman

    All year you and I have been on a mission. It’s to discover if now is the time to be upping your exposure to risk assets, or dialling it down. I put my stake in the ground ages ago: get bullish! It’s working.

  • The Perfect Marriage: Combining Fundamental AND Technical Analysis
    By James Cooper

    James Cooper shows readers examples of how he ‘marries up’ an understanding of the rocks (as a former geologist) and his other passion, technical analysis, the ability to read a chart.

  • Your best chance to be in the top 10% will come from here
    By Callum Newman

    Oil was a big macro influencer fifty years ago. The OPEC embargo shook even mighty America for a moment in time. But it’s not 1973 anymore. I have a better idea.

Primary Sidebar

Latest Articles

  • Ignore the bores and the bears: some shares are going gangbusters
  • The Perfect Marriage: Combining Fundamental AND Technical Analysis
  • Your best chance to be in the top 10% will come from here
  • How the AI explosion will perfectly offset the demographic implosion
  • Oil price threat to the market: a fizzer…so far

Footer

Fat Tail Daily Logo
YouTube
Facebook
x (formally twitter)
LinkedIn

About

Investment ideas from the edge of the bell curve.

Go beyond conventional investing strategies with unique ideas and actionable opportunities. Our expert editors deliver conviction-led insights to guide your financial journey.

Quick Links

Subscribe

About

FAQ

Terms and Conditions

Financial Services Guide

Privacy Policy

Get in Touch

Contact Us

Email: support@fattail.com.au

Phone: 1300 667 481

All advice is general in nature and has not taken into account your personal circumstances. Please seek independent financial advice regarding your own situation, or if in doubt about the suitability of an investment.

The value of any investment and the income derived from it can go down as well as up. Never invest more than you can afford to lose and keep in mind the ultimate risk is that you can lose whatever you’ve invested. While useful for detecting patterns, the past is not a guide to future performance. Some figures contained in our reports are forecasts and may not be a reliable indicator of future results. Any actual or potential gains in these reports may not include taxes, brokerage commissions, or associated fees.

Fat Tail Logo

Fat Tail Daily is brought to you by the team at Fat Tail Investment Research

Copyright © 2025 Fat Tail Daily | ACN: 117 765 009 / ABN: 33 117 765 009 / ASFL: 323 988