SYDNEY, July 23: Australian building products maker Alesco Corp on Monday rejected a sweetened A$210 million ($218 million) takeover offer as inadequate, a move that has turned paints maker Dulux Group’s bid into a hostile one.
Dulux, which has built up a 30 percent stake in Alesco, said earlier in the day it was taking its offer directly to shareholders.
Dulux, which wants Alesco to diversify into home improvement products, raised its cash offer to A$2.05 a share from A$2 and offered 18 cents a share in franking credits attached to dividends, taking the offer to A$2.23 a share or a 9.3 premium over Friday’s close.
‘The Alesco Board does not believe it is prudent to pay a dividend of 42 cents per share as suggested by DuluxGroup,’ it said in a statement, referring to the need for a dividend of that size to be eligible for the proposed franking credits.
Alesco last paid a final dividend of 7 cents in September 2011, according to its website.
Dulux, which sells products under the Dulux, Selleys, British Paints and Berger brands, said the offer was its best and final offer.
Alesco shares were 0.5 percent higher at A$2.05 and Dulux was 0.2 percent down at A$3.045 as of 0514 GMT. (agencies)
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