A sweetened $210 million takeover offer from DuluxGroup has failed to entice Alesco Corporation’s board into saying yes to the predator’s proposal.
Dulux stepped up its push to gain control of the garage door, windows and construction products maker by increasing its offer by 11 per cent on Monday.
But Alesco, which has spurned Dulux since it began making overtures with a $188 million offer in May, branded the fresh bid “materially inadequate”.
Dulux sweetened its original $2.00-a-share offer to $2.23, made up of $2.05 in cash plus a payment of up to 18 cents a share in franking credits.
However, for Dulux to be able to pay the 18 cents in franking credits to Alesco shareholders, the takeover target’s board would have to declare and pay a fully-franked dividend of 42 cents a share.
In a brief statement, Alesco urged shareholders to reject Dulux’s fresh offer.
Alesco said it did not believe it was prudent to pay a 42-cent dividend at this time and accused Dulux of making “a number of misleading comments” in its statement to the stock market outlining its latest offer.
Dulux managing director Patrick Houlihan said while Alesco rebuffed his company’s latest offer during high-level talks late last week, he was hopeful its shareholders would view the new offer as compelling.
“You just have to do the maths,” he told AAP.
“You just have to look at how the stock market is going and the uncertainty in the new housing segment since we made the offer.”
Dulux has so far managed to convince one third of Alesco’s investors to take up its offer.
Mr Houlihan said while he hoped the revised offer would convince more to accept, Dulux was willing to walk away.
“We have said all along this is not a must-do deal,” he said, adding the revised offer was a final one unless a rival predator came to the table.
“At the end of the day we have been consistent with our view on price and the revised offer is taking a pragmatic approach to bringing this to a conclusion.”
Dulux has again extended the acceptance cut-off period for Alesco shareholders, this time from August 3 to August 28.
It will also consider waving other conditions attached to its bid after reviewing Alesco’s latest earnings results when they are released on Tuesday.
Alesco has remained firmly opposed to Dulux’s overtures, citing an independent expert’s report describing the original $2.00-a-share offer as unreasonable.
The report suggested Alesco was instead valued at between $2.23 and $2.52 a share.
Alesco’s shares closed one cent lower at $2.03 while Dulux fell five cents to $3.00.
