Fletcher offer ‘compelling value’: Taylor

FLETCHER Building’s boss has put the case for its $282 million proposed takeover of Steel & Tube, saying it is not only ‘‘good value but compelling value’’.

Ross Taylor, Fletcher chief executive, said: ‘‘It makes good economic sense for both parties. It’s also good value and I wouldn’t be doing it if I didn’t think so. It’s compelling value for Steel &

Tube shareholders — not just good value.’’

The proposal was also within Fletcher’s longerterm strategy, announced in Sydney this year, he said, and extensive discussions were undertaken with the target company.

‘‘We’ve talked to Steel & Tube shareholders, telling them we’d look at opportunities. We’ve spoken to the board and institutional shareholders, all done on a confidential basis. When we look at the discussion and proposals, it’s quite a compelling one at the price. The premiums we’re offering is 35 to 38% on the fiveday or onemonth average trade,’’ he said.

Steel & Tube shares jumped 21% on the back of the $1.70 per share offer. The company’s shares were trading at $1.56, up 16.4%, about 3pm.

Steel & Tube earlier said the offer ‘‘significantly undervalues’’ the company.

‘‘The fact that Fletchers has made this indicative offer speaks to our reputation and the strength of our business. Obviously, Fletchers sees a lot of value in our business and its future potential as the benefits of our turnaround strategy start to become clear . . . as do we,’’ chairwoman Susan Paterson said in a statement. — NZME