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Fletcher Building makes bid to buy Steel and Tube

Steel News - Published on Wed, 03 Oct 2018

Image Source: News Talk ZB
Radio New Zealand reported that Fletcher Building has made a non-binding indicative offer to Steel and Tube of $1.70 a share, which values Steel and Tube at about NZD 280 million. Steel and Tube chief executive Mark Malpass said it became aware that its big shareholders were being approached by Fletcher Building to see if they were willing to sell. He said the offer appeared opportunistic and was unwelcome. He said "The offer is well below what the board regards as the intrinsic value of the company."

Mr Malpass said Steel and Tube is recovering after a tough period, in which it posted big losses because of the broader construction sector problems. The company was forced to sell assets, restructure its business, and raise $81m to bolster its finances. He said "We've got a clear focus on growth and improving our financial performance ... Fletchers obviously sees a lot of value in our business and a lot of potential.”

Steel and Tube's share price rocketed after the news, gaining as much as 21 percent to a near four month high of $1.61 a share before it eased back slightly.

Steel and Tube said it thought any offer would need to go before the competition watchdog, the Commerce Commission, which could take some time to decide.

Source :

Posted By : Sanju Moirangthem on Wed, 03 Oct 2018
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