Fletcher Building launches bid for Crane Group

Wednesday 15th December 2010

Fletcher Building has launched a takeover bid for ASX-listed Sydney-based building and industrial products company Crane Group in a deal that values Crane at $A740 million ($NZ983 million).

Fletcher today said it had acquired a 14.9% pre-bid stake in Crane.

It was offering one Fletcher Building share and $A3.43 in cash for each Crane share, with the bid conditional on, among other things, the acquisition of 90% of Crane shares.

Based on the Fletcher Building closing share price yesterday, the offer equated to a value of $A9.352 for each Crane share, Fletcher Building said.

That represented a 28% premium to the Crane share price.

Fletcher Building chief executive Jonathan Ling said the offer was an attractive opportunity for Crane shareholders to both receive cash and become shareholders in a larger and more diversified Australasian building materials manufacturing and distribution company.

Fletcher Building had delivered shareholders a total aggregate return of 435% since it listed as a separate company in 2001 compared to Crane's 93% over the same period, Mr Ling said.

"The combined group will have an enhanced presence and liquidity on both the Australian and New Zealand stock markets," Mr Ling said.

The Crane businesses were complementary to Fletcher Building's operations in the building materials and trade distribution markets and would enable the company to diversify its presence in Australia to include the plastic pipe and plumbing trade distribution markets.

Fletcher Building said it bought 13.1% of the shares in Crane from institutional shareholders immediately before the announcement date, for $A9.35 cash.

It intended to operate Crane as a separate division within the larger group and employees within Crane's trading businesses would remain in their roles on the same or substantially the same conditions as now.

The combined group would seek to derive savings from a reduction of head office and administrative duplications, and other operating benefits may arise.

The offer would be funded by the issue of 67.3 million Fletcher Building shares,totalling $A400 million, and bank debt of about $A340 million from an existing undrawn bank facility.

The offer needs to meet a range of regulatory requirements in Australia and this country.

NZPA

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