After a tumultuous month, what’s next for Boral investors?
The post The Boral (ASX:BLD) share price is up 9% in a month. What’s next? appeared first on The Motley Fool Australia. –
The Boral Limited (ASX: BLD) share price has been a surprise performer over the past month. Boral shares were trading at $6.79 a month ago. But today, they are commanding a price of $7.38 a share. That’s an 8.76% gain for the past 30 days.
The S&P/ASX 200 Index (ASX: XJO) has actually gone backwards by 0.42% over the same period. As such, Boral has emerged as a real ASX 200 winner. That’s good news for a company that is sitting at the same share price today as it was back in November 2005.
Of course, the Boral share price performance over the month that was, had little to do with the company’s performance. Instead, it related to a rather dramatic saga that has been playing out since mid-June.
Boral has a stalker in the form of Seven Group Holdings Ltd (ASX: SVW). Seven put up an offer of $6.50 a share for Boral back in May. It subsequently upped this offer to $7.30 after enough shareholders accepted the cash that allowed Seven to increase its ownership of Boral to above 29.5%.
But Seven wasn’t done there. At the start of this month, Seven once again upped its offer. This time to $7.40 a share. This was followed by Seven further increasing its ownership of Boral to above 40%.
Following this latest chapter, there is now talk that Ryan Stokes will be requesting an additional seat on Boral’s board. Stokes is the Seven Group CEO and a current Boral board member.
Where to next for the Boral share price?
All of this toing and froing has seen the Boral share price gain significant interest from investors. No doubt helped along by Seven Group’s aggressive uptake of Boral stock.
But since the takeover bid officially closes on 15 July (this Thursday), where is the Boral share price headed to next?
Well, it’s hard to say. Seven Group may have some plans that aren’t yet clear to the markets. Seven seems to have kept both investors and Boral guessing at every turn over the past month.
But a report in today’s Australian Financial Review (AFR) had a go. The AFR reckons Boral shares are “expected to fall back towards $7 a share, and possibly as low as $6.80” once the bid is completed. However, the report also noted that “the stock will be supported by the fact it contains cash worth about $3.20 a share”.
Additionally, it cites the fact that Boral will be reporting its full-year earnings next month. The AFR claims that if these earnings “include materially weaker profit numbers from the Australian business, it will justify the tough approach taken by [Ryan] Stokes”.
At the current Boral share price of $7.39 (at the time of writing), the company has a market capitalisation of $8.47 billion.
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Motley Fool contributor Sebastian Bowen 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.