Fletcher sweetens offer for Crane Group, wins support

Fletcher sweetens offer for Crane Group, wins support of target’s directors

Jan. 31 (BusinessDesk) – Fletcher Building Ltd. sweetened its takeover offer for Crane Group, winning support from the target’s directors for a deal that will increase its dominance in the Australasian market for building products such as pipes.

Fletcher lifted its offer to A$3.50 cash and one of its own shares for each Crane share after negotiations over the past few days. The implied value of the proposal, which includes Crane paying a special dividend, is A$10.07 a share, Fletcher said in a statement today. The trading halt on its shares has been lifted.

The Auckland-based company’s previous cash and scrip offer for ASX-listed Crane was in a range of A$9.05 to A$9.45 per share – below Crane’s independent valuation range of A$9.92 to A$11.56.

“Our discussions with Crane have reinforced the strategic rationale of this transaction and we look forward to having Crane shareholders become shareholders in the combined group,” chief executive Jonathan Ling said.

The deal remains subject to antitrust approval in both countries, with a particular focus on pipes and pipe systems, where both companies are active.

Fletcher plans to fund the increased cash offer out of existing banking facilities while Crane is to fund both its special and interim dividends.

The new implied value is based on the closing price of Fletcher shares on the ASX of A$6.07 and A$3.50 a share in cash, while Crane would pay a 50 cents-a-share special dividend. In the previous offer, the cash component was A$3.47.

The implied value of the revised offer will vary with the market price of Fletcher shares on the ASX.

Shares of Crane Group last traded at A$9.58 on the ASX.

(BusinessDesk)

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