Insights

Boral (ASX:BLD) share price lifts amid Meridian sale completion

Boral shares are rising after completing the sale of Meridian Brick.
The post Boral (ASX:BLD) share price lifts amid Meridian sale completion appeared first on The Motley Fool Australia. –

The Boral Limited (ASX: BLD) share price is up amid the completion of the sale of its 50% owned Meridian Brick business in North America to Wienerberger for US$250 million. Boral’s share is US$125 million, which is effective 6 October 2021.

What is Boral going to do with the money?

Management said that proceeds from this divestment of US$125 million will add to surplus capital from other recent divestments.

Boral is seeking shareholder approval at the annual general meeting (AGM) on 28 October 2021 to return up to A$3 billion of surplus capital to shareholders by an equal capital reduction, subject to shareholder approval and an appropriate class ruling from the Australian Taxation Office.

At the time of the initial news, Boral said that subject to exchange rates and final adjustments, Boral expects to report a “small” pre-tax accounting profit on the sale of approximately $10 million.

Why did it decide to sell Meridian Brick?

The Boral CEO and managing director Zlatko Todorcevski said the divestment of Meridian Brick represents the final step in Boral’s exit from brick operations globally:

In recent years Boral has divested its interests in bricks in Australia and since forming the bricks joint venture in the US with Lone Star in 2016, the plan was to ultimately prepare the business for sale.

As part of this process, Meridian’s leadership was refreshed with the appointment of a new CEO in December 2018, and a stronger focus on improving performance.

The agreed sale represents a fair value for the business and reflects its improved performance.

The divestment of Meridian is a further step in Boral’s portfolio review works. It helps to streamline our US business and allows us to further focus on the improvement initiatives underway in the remaining businesses in Boral North America.

The Brickworks share price has risen by around 30% since the sale of this business.

What may be influencing the Boral share price?

Seven Group Holdings Ltd (ASX: SVW) has been buying shares of Boral and had offered $7.40 per Boral share. Seven Group now owns around 70% of the business.

However, the Boral independent board committee recommended that shareholders reject the offer because it was believed the offer undervalues the business.

The board said that the offer of $7.40 per share was materially below the independent expert’s assessed valued of between $8.25 to $9.13 per share. Grant Samuel also advised Boral that the final price agreed for the sale of its North American building products business of US$2.15 billion exceeded the US$1.8 billion to US$2 billion valuation range attributed to its independent expert report.

Boral’s board said that the renewed strategy is expected to unlock significant value in the near-term from the potential divestment of assets, particularly in North America, and will aim to drive value creation and earnings growth, including through its transformation program.

Macquarie Group Ltd (ASX: MQG) is one of the brokers with a positive outlook on the Boral share price. It has a buy rating on the business, with a price target of $7.30.

The post Boral (ASX:BLD) share price lifts amid Meridian sale completion appeared first on The Motley Fool Australia.

Should you invest $1,000 in Boral right now?

Before you consider Boral, you’ll want to hear this.

Motley Fool Investing expert Scott Phillips just revealed what he believes are the 5 best stocks for investors to buy right now… and Boral wasn’t one of them.

The online investing service he’s run for nearly a decade, Motley Fool Share Advisor, has provided thousands of paying members with stock picks that have doubled, tripled or even more.* And right now, Scott thinks there are 5 stocks that are better buys.

*Returns as of August 16th 2021

More reading

Here’s why the Boral (ASX:BLD) share price is lifting today
Why the Boral (ASX:BLD) share price has underperformed the ASX 200 in the last 3 months
The Boral (ASX:BLD) share price has fallen 17% since Seven took control
This year’s ASX 200 Santa Rally to get a whopping $84bn cash boost

Boral (ASX:BLD) share price lifts amid latest business sale

Motley Fool contributor Tristan Harrison has no position in any of the stocks mentioned. The Motley Fool Australia’s parent company Motley Fool Holdings Inc. has no position in any of the stocks mentioned. The Motley Fool Australia owns shares of and has recommended Macquarie Group Limited. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

Trade The World Anywhere & Anytime!

Mobile app platform with over 50,000 global listed securities across 12 markets (over 70% global market capitalisation), right from your Android or iOS device.

Integrated with exclusive trading idea and investment analysis tools to help you find actionable insight on virtually every financial instrument across our 12 global markets, to help you optimise your trading strategies.

Refer Your Friends

Tell your friends about Monex and gift them FREE access to our trading tools.

We respect your privacy and will only send this one email notification to your friends. 

Share With Your Friends

Share on facebook
Share on twitter
Share on linkedin

Monex Trading Tools Access and Usage Terms

The Monex Trading Tools (referred to as ‘tools’ hereafter) are available to you inside your client portal;


To activate access to the tools, you must have a verified and approved trading account and have made a deposit of at least AUD $1000.


An active and funded account with a positive trading balance is required to continue to have access to the tools;


Although the tools are available to you indefinitely, Monex Securities may at it’s discretion disable access to the tools in the future;


Monex securities reserves the right to change these terms and conditions from time to time, as it sees fit, without notice.

Important Notice
iOS & Android App - 12 International Markets & Over 70% Global Market Cap. $0 Brokerage On US Trades. Click Here!