Dulux extends Alesco offer

13 Jul 2012, 9:05 pm   -   Source: AAP
DuluxGroup has given Alesco shareholders an extra two weeks to accept its $188.4m takeover offer. (AAP)

DuluxGroup has given Alesco shareholders an extra two weeks to accept its $188.4m takeover offer. (AAP)

DuluxGroup has given Alesco Corporation shareholders an extra two weeks to accept its $188.4m takeover offer.

DuluxGroup has rejected Alesco Corporation's claim that it doesn't have support from the takeover target's shareholders to secure its $188 million bid.

Dulux on Friday extended the cut-off period for Alesco shareholders to accept its offer for a second time, with the deadline moving from July 20 to August 3.

It also waived a number of conditions attached to the offer, including confirmation of Alesco's earnings and regulatory approvals.

The paintmaker has already received the go-ahead from its financiers to waive the 90 per cent minimum acceptance condition, but has not made up its mind whether to do so.

Dulux said it had built up its stake in building products supplier Alesco to 29.9 per cent, adding that it was receiving strong support from Alesco's institutional investors.

However, Alesco chairman Mark Luby rejected the claim of support from Alesco shareholders, saying that since announcing the offer more than 10 weeks ago, Dulux had received acceptances of less than 10 per cent.

"Furthermore, given that the offer has now been extended by more than one month, shareholders who have accepted the bid also have the ability to withdraw their acceptances," Mr Ruby said in a letter to Alesco shareholders.

"We urge those shareholders who have accepted to date to withdraw, rather than have their shares locked into a highly conditional and inadequate offer."

Dulux warned Alesco shareholders that the company's share price is likely to fall if the takeover target does not accept Dulux's offer, noting that no other bids are on the table.

"The offer provides an attractive exit from a company whose share price has significantly underperformed relative to the market index," Dulux said.

But Mr Luby said the Dulux offer was opportunistic, coming at the low point of the housing cycle and before shareholders received a proposed fully franked special dividend of 10 cents per share.

Independent expert Lonergan Edwards & Associates has said Dulux's $2-a-share offer was unreasonable and that Alesco was instead valued at between $2.23 and $2.52 a share.

Alesco's shares closed two cents lower at $1.97, but are up by nearly 42 per cent so far this year.

Dulux was one cent higher at $3.04.

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