(Reuters) -Australian building materials firm CSR Ltd has backed an A$4.30 billion ($2.81 billion) non-binding takeover proposal from French construction materials group Saint-Gobain <SGOB.PA>, granting it access to its books to make a final offer.
The offer price of A$9.0 per share is at a premium of 13.2% to CSR’s last close.
On Wednesday, CSR shares soared 17.4% before trading was paused following media report of the takeover offer.
“CSR is currently providing Saint-Gobain with confirmatory due diligence access to progress to a binding transaction at an agreed offer price of A$9.00 per share,” the Sydney-based construction materials firm said in a statement.
“Following review of the proposal, the CSR board unanimously resolved to pursue the proposal,” it added.
The proposal allows CSR to pay a final dividend of up to A$0.25 per share for fiscal ending March 31 which would then be deducted from the cash offer price, CSR added.
“The combination is an attractive opportunity for both companies,” Saint-Gobain said in a statement late on Wednesday, adding that the acquisition would give the French company an opportunity to enter the Australian market.
The proposal is subject to approval from CSR shareholder and Australia’s foreign investment review board, among others.
($1 = 1.5284 Australian dollars)
(Reporting by Sameer Manekar in Bengaluru; Editing by Shailesh Kuber and Maju Samuel)
