Crane rejects Fletcher offer as too low
Dec. 20 (BusinessDesk) – Crane Group, the Australian plumbing supply chain and plastic piping company, has pooh-poohed a takeover tilt from Fletcher Building Ltd.
In a statement to the ASX, the company’s board said the A$9.35 a share offer made up of A$3.43 cash and one Fletcher share was “inadequate and undervalues the company.”
A successful offer, which values the target at A$740 million, would make Fletcher’s Australian business bigger than the local unit, which Crane says isn’t reflected in the price.
“The offer does not take into account the substantial synergies expected to be available to Fletcher Building as a result of the acquisition,” Crane said. “Fletcher Building has acknowledged the offer is coming at a low point in the industry cycle.”
Fletcher has already acquired 13% of Crane from institutional investors at the offer price, lifting its existing holding to 14.9%.
The New Zealand company plans to operate Crane as a separate division, though a reduction in head office and administrative functions would cut costs.
Fletcher shares rose 0.7% to $7.78 on the NZX and were unchanged at A$5.75 on the ASX, while Crane’s shares held at A$9.49.