French group Saint-Gobain in $4.3bn tilt for CSR

French building products giant Saint-Gobain has lobbed a $9-a-share takeover offer for Gyprock and Monier Roofing owner CSR.

French building products giant Saint-Gobain has lobbed a $4.3bn non-binding indicative offer to buy all the shares in CSR.

Saint-Gobain confirmed on Wednesday night, as reported in DataRoom, that it has approached the CSR board with a $9-a-share cash offer to acquire all the issued capital in the Australian company by way of a scheme of arrangement.

“The board of CSR has announced that it has unanimously resolved to pursue the offer at an agreed price of $9.00 per share subject to entry into binding transaction documents,” Saint-Gobain said in a statement.

CSR shares were halted on Wednesday ahead of the announcement but last traded at $7.95, a 13.2 per cent discount to the offer price, which values the company at $4.3bn.

Under the proposal, CSR would be entitled to pay shareholders a final dividend of up to 25c a share for the year ended March 31, 2024, which would be deducted from the cash offer price.

Saint-Gobain said its offer is subject to confirmatory due diligence, which it is currently finalising, and entry into binding transaction documents.

Also, any agreed transaction will be subject to conditions, including regulatory approvals and CSR shareholders’ approval.

French group Saint-Gobain has approached CSR with a $9-a-share takeover offer.

“Saint-Gobain believes that the combination is an attractive opportunity for both companies leveraging our long-term partnership with similar business models, cultural fit and development opportunities,” the company said. The French group employs 168,000 people in 75 countries and generated sales of €51.2bn ($84.3bn) in 2022 from brands such as British Gypsum, Gyproc and Solar Gard.

“This acquisition would be fully aligned with Saint-Gobain’s strategy as a worldwide leader in light and sustainable construction and an opportunity to enter the Australian market,” Saint-Gobain said.

But it noted “no transaction is assured at this stage.”

Brokers earlier this month rejigged their outlook for CSR shares with UBS cutting its price target by 1.5 per cent to $6.60 a share.

UBS said that weakness in housing demand, along with so-called ‘alterations and additions’ work, is unlikely to be offset by strength in other areas of construction.

“We still see the next EPS (earnings per share) move as down which in our view means risk/reward is skewed to the downside,” says UBS, moving its recommendation on the stock to sell from buy.

At the same time Jarden brokers raised their price target for CSR by 10 per cent to $6.60.

CSR, which owns the Gyprock, Monier Roofing and PGH Bricks and Pavers, said late last year it was investing in factory upgrades and more trucks in an effort to meet surging demand for housing.

The company’s first half profit to the end of September 30, 2023, fell 12 per cent to $91.5m.