DuluxGroup Limited has today announced that it has upped its offer for building and renovation product supplier Alesco Corporation Limited. The new offer is for $2.05 cash per share, plus allowing Alesco shareholders to receive up 18 cents in franking credits attached to any dividends declared by Alesco.
The 18 cents in franking credits would require Alesco’s board to declare a 42 cent dividend per share.
In what is a slightly complex change, should Alesco declare the 42 cent dividend, the cash component offered by DuluxGroup would be adjusted to $1.63 in cash, plus the 42 cents in dividends from Alesco (plus 18 cents in franking credits). DuluxGroup also declared that this will be the company’s last and final offer.
Alesco has indicated that it is not willing to support the revised offer, but also unwilling to indicate at what level it would recommend the offer. Alesco’s independent expert has valued Alesco’s share between $2.23 and $2.52. DuluxGroup’s new offer comes in at the bottom of that range.
Alesco is due to report its full year results tomorrow, 24th July 2012, but as the board doesn’t support DuluxGroup’s offer, it appears unlikely that the company will declare a 42 cent dividend. As a comparison, Alesco paid 13.5 cents in dividends in 2011.
DuluxGroup shares were unchanged in early afternoon trading, while Alesco’s shares were up 1% to $2.06.
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