Kerry Stokes' Seven stake puts spotlight on Boral
Billionaire Kerry Stokes' move to pick up a 10 per cent shareholding in Boral has put the spotlight on the ASX-listed building products company which has been under pressure as it faces shareholder class actions and searches for a new chief executive.
The 10 per cent shareholding means Seven Group, headed by chief executive Ryan Stokes, is well placed to benefit from the expected stimulus spending on housing construction and major infrastructure works in response to the coronavirus pandemic. It is Seven's first foray into buildings products and comes as Seven West Media, which is owned by the $5.7 billion ASX-listed conglomerate, is struggling under $541 million in debt.
The market welcomed the move, with Boral shares up 4.7 per cent in morning trade to $3.70 just after 11.15am. Seven Group Holdings were up 1.5 per cent to $17.
Seven Group, run by Ryan Stokes, has picked up a large slice of building materials company Boral.Credit:James Alcock
Seven's move will put the focus on Boral, which has endured a challenging period over the past two years and has issued a series of profit warnings. Its long-term chief executive Mike Kane is due to depart and the board is searching for a replacement.
Boral has faced pressure from shareholders after it revealed that financial irregularities had been uncovered in its North American Windows business, which the building products company said had overstated pre-tax earnings by $US24.4 million ($36.5 million) between March 2018 and October 2019. Two shareholder class actions have been launched by Australian investors against Boral over the US windows business
Substantial shareholder notices lodged with the ASX show that the Stokes' forces held 94.8 million Boral shares as at May 29 and acquired a further 16.2 million on June 2. The prices paid for the shares varied widely, with some acquired for less than $2.50 each, and others acquired at prices greater than $3.
Seven Group Holdings owns part of the gas company Beach Energy and 41 per cent of Seven West Media, which is the operator of the Seven television network. It also owns the national hire business Coates Hire, and WesTrac, the only authorised dealer of Caterpillar excavation and machinery equipment in NSW, Western Australia and the ACT.