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Building materials supplier Boral says it has received strong support from institutional investors whilst raising money to fund its $US2.6 billion acquisition of Headwaters Incorporated.

Boral has raised about $A1.58 billion through an institutional share placement and an institutional entitlement offer.

It will begin a retail entitlement offer, expected to raise about $A483 million, on November 30.

Boral said the institutional placement was greatly oversubscribed and the entitlement offer was strongly supported, with a 91 per cent take-up.

“We are extremely pleased with the strong support for the equity raising from existing institutional shareholders and new investors,” Boral chief executive Mike Kane said.

“We see the success of the equity raising as a clear endorsement of Headwaters’ compelling strategic fit within the existing Boral business.

“We are now looking forward to bringing together the two portfolios, driving integration and delivering substantial synergies to create value for shareholders.”

The new shares under the institutional placement and the entitlement offer sold for $4.80 each.

A bookbuild for the shortfall in the take-up of shares under the institutional entitlement offer resulted in a price of $5.25 per share – a 45 cent premium to the $4.80 offer price.

Boral shares, which came out of a trading halt on Thursday, were 68.08 cents, or 11.83 per cent, lower at $5.075 at 1116 AEDT.

Boral on Monday announced it would acquire New York-listed Headwaters, a major manufacturer of building products and one of the largest marketers of fly ash in the United States. Fly ash, a by-product of coal combustion in power stations, is added in manufacturing of concrete as a cement substitute to improve performance and quality.

Boral said the acquisition, which includes Headwaters’ net debt of $US704 million, would be transformative for the company – more than doubling Boral’s US business.

 
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