Fletcher Building raises Crane offer

Fletcher Building has raised its bid for Australian-based plumbing supplies and plastic pipelines maker Crane Group, and the Crane board is recommending its shareholders accept the revised offer.

Fletcher Building today said the new offer was one Fletcher Building share and $A3.50 ($NZ4.50) cash for each Crane share.

Crane was also to pay A50c per share as a fully franked special dividend. The total implied value to be received by Crane shareholders including the special dividend was $A10.07 per Crane share.

The previous Fletcher Building offer had been priced at $A9.35 a share and comprised $A3.47 cash and one Fletcher Building share for every Crane share.

Shares in both Fletcher Building and Crane were put on a voluntary trading suspension last Thursday. The Fletcher Building halt has now been lifted.

Today Fletcher Building said Crane's fully franked special dividend from accumulated profits of A50c "per share and Crane's interim dividend to be paid on February 22 would not reduce the cash consideration of the revised offer.

Crane's directors were unanimously recommending Crane shareholders accept the revised offer subject to no superior offer being made.

Crane directors intended to accept the revised offer with respect to the holdings of Crane shares they owned or control, Fletcher Building said. Based on the Fletcher Building share price of $A6.07 at the close of trade on the ASX last Tuesday, and assuming a A50c special dividend was paid by Crane, the total implied value to be received by Crane shareholders equated to $A10.07 for each Crane ordinary share.

That was within the fair market value range from an independent expert engaged by Crane.

It was a 35% premium to the closing price of Crane ordinary shares -- adjusted for "Crane's interim dividend of A22c -- on December 14, the date prior to Fletcher Building making its first announcement of the takeover offer for Crane. The revised offer also represented a prospective price/earnings multiple of about 20.6x for the 2011 financial year.

While Fletcher Building had consented to Crane's A22c interim dividend not reducing the cash consideration of the revised offer, Crane shareholders who accepted would not receive the interim Fletcher Building dividend, which would not be more than 16c (A12c) per share. Fletcher Building currently has about 15 percent of Crane's ordinary shares.

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