WELLINGTON, Jan 31 (Reuters) - New Zealand building supplies firm Fletcher Building Ltd sweetened its bid for Australia's Crane Group by about A$44 million on Monday, winning the support of the board which has reversed its hostile stance.
Fletcher Building, New Zealand's largest listed company and a 14.9 percent owner of the plumbing and building supplies company, has raised its offer to an implied value of about A$9.54 to A$10.07 a share, valuing the company at A$797 million ($789 million).
Chief executive Jonathan Ling said he was pleased to have struck a deal which was supported by both boards.
'Our discussions with Crane have reinforced the strategic rationale of this transaction,' Ling said.
The new offer sees the cash component raised from A$3.47 to A$3.50, with implied value of Fletcher Building shares of A$6.07. The main change is that Crane's interim and special dividends will now not affect the cash payment under the offer.
Crane rejected Fletcher's initial unsolicited $754 million offer as undervaluing the company, with a report prepared for the company by Ernst and Young putting the value of Crane at between A$9.92 and A$11.56 a share.
The move to lift the offer had been widely expected after the two companies were put on trading halt last Thursday, with analysts speculating the bid would be raised to the bottom end of the Ernst and Young valuation range.
As part of the new offer, Fletcher and Crane have entered an exclusivity agreement.
Shares in Fletcher Building, dipped 3 cents to NZ$7.86 in early New Zealand trade after its trading halt was lifted, matching the fall in the broader market.
Analysts say the deal will further diversify the earnings base of Fletcher Building, one of the world's biggest laminates'
makers which owns Laminex and Formica as well as interests in building materials and construction.
The offer is scheduled to close on Feb. 25.
Fletcher said the revised offer is a 35 percent premium to Crane's share price prior to the initial takeover announcement and is a 20. 6 times price to earnings multiple based on the expected full year 2011 result.
(Reporting by Adrian Bathgate; Editing by Ed Davies)
((adrian.bathgate@reuters.com; +64-4-4714233; Reuters Messaging: adrian.bathgate.reuters.com@reuters.net)) Keywords: FLETCHERBUILDING/CRANE (If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com) COPYRIGHT Copyright Thomson Reuters 2011. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.
Fletcher Building, New Zealand's largest listed company and a 14.9 percent owner of the plumbing and building supplies company, has raised its offer to an implied value of about A$9.54 to A$10.07 a share, valuing the company at A$797 million ($789 million).
Chief executive Jonathan Ling said he was pleased to have struck a deal which was supported by both boards.
'Our discussions with Crane have reinforced the strategic rationale of this transaction,' Ling said.
The new offer sees the cash component raised from A$3.47 to A$3.50, with implied value of Fletcher Building shares of A$6.07. The main change is that Crane's interim and special dividends will now not affect the cash payment under the offer.
Crane rejected Fletcher's initial unsolicited $754 million offer as undervaluing the company, with a report prepared for the company by Ernst and Young putting the value of Crane at between A$9.92 and A$11.56 a share.
The move to lift the offer had been widely expected after the two companies were put on trading halt last Thursday, with analysts speculating the bid would be raised to the bottom end of the Ernst and Young valuation range.
As part of the new offer, Fletcher and Crane have entered an exclusivity agreement.
Shares in Fletcher Building, dipped 3 cents to NZ$7.86 in early New Zealand trade after its trading halt was lifted, matching the fall in the broader market.
Analysts say the deal will further diversify the earnings base of Fletcher Building, one of the world's biggest laminates'
makers which owns Laminex and Formica as well as interests in building materials and construction.
The offer is scheduled to close on Feb. 25.
Fletcher said the revised offer is a 35 percent premium to Crane's share price prior to the initial takeover announcement and is a 20. 6 times price to earnings multiple based on the expected full year 2011 result.
(Reporting by Adrian Bathgate; Editing by Ed Davies)
((adrian.bathgate@reuters.com; +64-4-4714233; Reuters Messaging: adrian.bathgate.reuters.com@reuters.net)) Keywords: FLETCHERBUILDING/CRANE (If you have a query or comment on this story, send an email to news.feedback.asia@thomsonreuters.com) COPYRIGHT Copyright Thomson Reuters 2011. All rights reserved. The copying, republication or redistribution of Reuters News Content, including by framing or similar means, is expressly prohibited without the prior written consent of Thomson Reuters.