Investors back Boral’s $3.5bn Headwaters buy

Existing investors in Boral appear to be backing the company’s $3.5 billion Headwaters acquisition, despite some questions on whether the building materials company overpaid for the target.

It comes as those close to the deal report that Boral’s $450m placement yesterday was oversubscribed and the rights issue was almost fully supported.

The placement was part of an overall $2bn-plus equity raising to fund the $3.5bn bid for Headwaters, announced to the market on Monday.

It remains an interesting test for the market at a time some expected that investors would sit on the sidelines, nervous about the implications from the result of the US election.

The placement, which closed early yesterday, was mostly supported by existing shareholders in Australia, eager to ensure their holdings in Boral were not diluted, and some from the US.

The institutional component of the rights issue closed last night and had more than a 90 per cent take-up, leaving about $110m worth of stock left to be sold off via auction.

The 23 million shares will be auctioned off through a book build that closes today with a $4.80 per share floor price.

The retail entitlement offer opens on November 30 and closes on December 9.

Boral’s shares remain in a trading halt at $6.15 and the stock’s theoretical ex-rights price is $5.66.

Bookrunners for the raising are Citi, Macquarie Capital and JPMorgan.

Meanwhile, UBS and Credit Suisse last night launched an auction for 5.2 million shares in APN News & Media left over from an equity raising to pay for its $268m Adshel deal last month. The shares were being offered at $2.45 each before a close at 5.30pm.

The deal involved APN buying the share in the company that it did not already own and tapped the market for $273m, including $72m and a five-for-13 renounceable entitlement offer of about $201m.