Why the Boral (ASX:BLD) share price has gained 45% in 6 months

The steady accumulation of shares is paying off for Seven…
The post Why the Boral (ASX:BLD) share price has gained 45% in 6 months appeared first on The Motley Fool Australia. –

The Boral Limited (ASX: BLD) share price has been on the tear in 2021. Shares in the Aussie manufacturing and building supplies company have climbed an impressive 48.9% higher to hit an all-time high on Thursday.

So, what’s helping the company’s shares outperform the S&P/ASX 200 Index (ASX: XJO) by more than 38% this year?

Why the Boral share price has gained 45% in 6 months

Arguably the biggest news of the year has been a takeover bid by Seven Group Holdings Ltd (ASX: SVW). The Kerry Stokes-led conglomerate lobbed an initial takeover bid for $6.50 per share back in May. Seven already owned a sizeable chunk of the company’s shares and was able to use the “creeping takeover” clause in Aussie takeover regulations to slowly build up its stake.

The Boral share price shot higher back in May on news of the bid. The board maintained that the offer was opportunistic and undervalued the company. Despite urging that shareholders should not sell, it looks like those words seem to have fallen on deaf ears.

From a starting stake of 23%, Seven Group and its subsidiaries have now acquired nearly 60% of Boral’s shares. A change in substantial holding notice yesterday showed Seven entities now control 59.23% of voting power in the company. That includes the purchase of 11,588,010 ordinary shares at $7.40 per share by Seven Group entities.

All of this means Seven is inching closer to a full acquisition of the building group. All of that buying, combined with an increased takeover price of $7.40, has helped push the Boral share price higher in recent months.

The takeover efforts have moved swiftly, however, Mr Stokes’ interest in the company is well-known. Seven’s initial stake was purchased at a time when Boral was struggling, and Seven Group CEO Ryan Stokes currently sits on the Boral board of directors.

Foolish takeaway

The Boral share price has been rocketing higher in the last 6 months. That has largely been as a result of steadfast efforts from Seven Group to keep its share purchase offer open and quietly accumulate control of the Aussie building group.

The post Why the Boral (ASX:BLD) share price has gained 45% in 6 months appeared first on The Motley Fool Australia.

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More reading

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Motley Fool contributor Ken Hall 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 has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy. This article contains general investment advice only (under AFSL 400691). Authorised by Bruce Jackson.

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