Shares in Steel & Tube have steadied around $1.50 since Fletcher Building withdrew its takeover offer.
An initial $1.70-per-share bid by Fletcher last month, valued at $282million, was rejected by Steel & Tube's board, as was a revised offer of $1.90, plus Steel & Tube to also pay a 5c-per-share special dividend.
Steel & Tube shares hit a high of $1.59 on October 4 following the offer and yesterday lifted 2c to trade up briefly at $1.50; albeit still down almost 20% on a year ago.
The proposed revised offer of $1.95 per share was a more than 50% premium on the share's pre-announcement five-day volume-weighted average price.
Steel & Tube had concerns it would take weeks for the Commerce Commission to rule on the merger while Fletcher chief executive Ross Taylor was ''confident'' the commission would grant clearance.
''Despite offering what we believe was a very attractive offer to Steel & Tube shareholders, our engagement with the Steel & Tube board has been unsuccessful and as a result we have withdrawn the acquisition proposal,'' he said.
Steel & Tube's board said it wanted to have an independent report on the increased offer, but Fletcher said it had had ample time to obtain an independent valuation.
Fletcher had attracted support from Milford Asset Management and Harbour Asset Management in progressing its bid. Harbour Asset owns 6.5% of Steel & Tube and Milford owns 15.3%, BusinessDesk reported.
The bid was seen as opportunistic by investors given Steel & Tube had only just raised equity at a deep discount to shore up its balance sheet after a series of impairment charges and restructuring costs pushed it outside its lending covenants. - Additional reporting BusinessDesk.
