Boral tactics are right out of the Stokes playbook

Boral chair Kathryn Fagg should make her intentions known. Picture: Jane Dempster

Boral chair Kathryn Fagg should suspend the building materials company’s share buyback immediately and, while she’s at it, hurry up with the handover of the chairmanship to Rob Sindel.

The aggressive move up the register by Seven Group Holdings’ Ryan Stokes means every share the company buys back reduces the shares outstanding, which helps him get to his target of 30 per cent control.

Surely Boral has better use for its money than to give Ryan Stokes an armchair path to control.

Boral’s share buyback is in early stages with 111.8 million shares of the targeted 10 per cent or 122 million still outstanding.

The Stokes tactics with Boral are right out of the family playbook - buy minority control without paying a control premium, which has played out at Seven, Beach Petroleum and other Stokes playthings.

The Boral board needs to look after its minority shareholders.

Fagg should do what she can to preserve at least some hope for shareholders that they will hang onto some sort of control premium for their shares.

Seven Group CEO Ryan Stokes. Picture: Britta Campion

Monday’s Stokes offer of $6.50 a share was rightly rejected by the Boral board but the game plan is clear - get to a controlling position as soon as possible.

That explains why Fagg must also make her intentions known so there is a clear line of authority in the company.

Fagg has previously indicated she will step down and the former CSR boss, Sindel, is the obvious candidate to take her place.

Now the Stokes plan is clear, the time for action from Fagg is now.

The company’s stock price is continuing its recent run today up 2.9 per cent at $6.09 a share, boosted by the building boom and further infrastructure spending.

The Stokes raid is a negative on that momentum.

Rob Sindel the obvious candidate to take over as Boral chair. Picture: AAP

Star’s poker face?

Separately, the casino battle is not short of blue sky, with Star Entertainment somehow claiming its offer for Crown Resorts is worth $14 a share.

Fact is, on yesterday’s market close, the bid is worth more like $11.28 a share on a straight scrip swap.

In calculating the synergy benefits Star says it will use $2.1 billion in debt to help fund its cash bid, which somehow is valued on a tax-effective basis at 18 times interest expenses of $1.1 billion.

Shareholders should know $2.1 billion in debt is $2.1 billion and forget the advertised $14 a share bid value .