Alesco Corp. (ALS), an Australian garage door maker, surged the most in 30 years after DuluxGroup Ltd. (DLX) said it bought a stake and plans to make a takeover bid that values the company at A$188 million ($196 million).
The stock rose 43 percent to A$2 at the close of Sydney trading, the biggest daily gain since 1982. DuluxGroup bought 20 percent of Alesco for A$2 a share from existing shareholders and plans to bid for the rest at the same price, it said in a statement today.
DuluxGroup expects the takeover to increase earnings in the first full year of ownership and bolster growth by adding Alesco’s construction materials to Australia’s largest paint producer. The bid is the biggest by the Melbourne-based company since it was spun off from Orica Ltd. (ORI) in July 2010.
“The addition of Alesco would provide DuluxGroup with new platforms for future growth,” DuluxGroup Chief Executive Officer Patrick Houlihan said today in the statement.
Alesco told shareholders not to take any action on the bid and its board will consider the offer “in due course” after only being advised by DuluxGroup of the proposed offer today, it said in a separate statement.
Sydney-based Alesco appointed Greenhill Caliburn Pty. (GHL:US) to advise it on the offer. Macquarie Group Ltd. (MQG) is advising DuluxGroup.
The offer for Alesco, whose shares had slumped 57 percent in the 12 months before today, is conditional on acquiring 90 percent of the stock. Dulux shares slipped 4.2 percent to A$2.97 at the close of Sydney trading.
Dulux had been assessing Alesco for about a year and if successful will consider the sale of its cabinet and window products unit, Houlihan said on a conference call.
The acquisition would reduce the company’s reliance on retail sales to consumers and increase the proportion of revenue it gets from trade clients, such as builders, to 60 percent from 45 percent previously, Houlihan told reporters. Some of the Alesco’s A$5 million in corporate costs would be saved by the combination, he said.
DuluxGroup has a new debt facility of A$270 million to help fund the transaction, it said in the statement.
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