20 Dec 2010

Crane Group shareholders advised to reject FB takeover bid

5:48 pm on 20 December 2010

The Crane Group is advising shareholders to reject an $A835 million takeover offer by Fletcher Building.

The board of the building and plumbing supplies company says the bid is opportunistic and undervalues the company.

Fletcher Building already owns 15% of Crane Group and is now offering $A3.43 per share plus one Fletcher Building share, for stock it does not own.

The offer values the company at $NZ982 million.

But the board of Crane Group says it comes at a low point in the industry cycle and the bid is opportunistic. It says the offer fails to recognise the company's standalone value, or its strategic value to Fletcher Building.

The head of Research at Forsyth Barr, Rob Mercer, says however that Fletcher Building's offer is full and fair, and Fletcher could add significant value to Crane Group's New Zealand operation.

Crane Group says the offer has highlighted the importance of the company to Fletcher Building's expanding Australian business but

that's not reflected in the price offered.

Fletcher Building's share price stayed unchanged at $7.73 on Monday.