Steel & Tube Holdings Limited (NZX: STU) is sending a letter to its shareholders about its Board’s decision to turn down a low value non-binding indicative offer (NBIO) to acquire the company by one of its largest competitors, Fletcher Building Limited (as announced to the market on 3 October 2018).
The primary reasons that the Board did not support the indicative offer were:
• The NBIO of $1.70 per share significantly undervalues the Board’s view of the company’s value.
• The proposed acquisition would face challenging issues for clearance under the Commerce Act that would take some time to work through, due to Fletcher’s vertical presence and significant size in several steel product markets. A chart detailing estimated market shares can be viewed on the Steel & Tube website at www.steelandtube.co.nz/investor-update.
The approach by Fletcher Building was unsolicited and unwelcome. It does not prevent higher value approaches from other interested parties. Steel & Tube’s Board will continue to evaluate strategies and actions that deliver the best value to shareholders.
The letter also outlines the positive progress Steel & Tube is making under its turn-around strategy. Steel & Tube has recently confirmed its earnings guidance of $25 million in earnings before interest and tax for the financial year ending 30 June 2019, and its intention is to resume payment of dividends in this financial year.
A copy of the Letter is attached and can also be viewed on Steel & Tube’s website at www.steelandtube.co.nz/investor-update.
For further information please contact:
Steel & Tube CEO
Tel: +64 27 777 0327
Media and communications
Tel: +64 27 246 2505