CSR enters into Scheme Implementation Deed with Saint-Gobain

Highlights

• CSR has entered into a binding Scheme Implementation Deed with Saint-Gobain
• Cash consideration of $9.00 per share
• Board unanimously recommends shareholders vote in favour of the Scheme, subject to the conditions outlined below
• Subject to CSR shareholder approval and other conditions

CSR Limited ("CSR" or the "Company") today announces that it has entered into a Scheme Implementation Deed ("SID") with Compagnie de Saint-Gobain ("Saint-Gobain") for the acquisition of all of the issued shares in CSR by way of scheme of arrangement at an offer price of $9.00 cash per share ("Scheme").

Details of the Scheme consideration

The Scheme consideration of $9.00 per share values CSR's equity at approximately $4,323 million and represents a premium of:
• 33% to the closing share price on 20 February 2024 ;
• 39% to the 3-month volume-weighted-average price to 20 February 2024;
• 48% to the 6-month volume-weighted-average price to 20 February 2024; and
• 61% to the 12-month volume-weighted-average price to 20 February 2024.

It also represents an EV / EBITDA multiple of 12.4x to CSR EBITDA to September 2023 ; and an EV / EBIT multiple of 16.1x to CSR EBIT to September 2023.

CSR has also agreed with Saint-Gobain that a fully franked dividend may be paid to shareholders, with the amount of that dividend deducted from the cash offer price . Additionally, a 2 cents per month ticking fee, accruing on a daily basis, will be payable if the effective date of the Scheme is delayed beyond 26 June 2024, which would not be deductible from the cash offer price.

CSR's Directors unanimously recommend the Scheme

CSR's Board of Directors unanimously recommend that CSR shareholders vote in favour of the Scheme, in the absence of a superior proposal and subject to an independent expert concluding (and continuing to conclude) that the Scheme is fair and reasonable and in the best interests of CSR shareholders. Each CSR Director intends to vote all of the CSR shares that he or she holds or controls in favour of the Scheme, subject to those same qualifications.

Commenting on the announcement, CSR Chairman John Gillam, said:

"The Board has very carefully considered the terms of the proposal and is unanimous in its recommendation to shareholders. The final proposal follows an initial offer in early January this year and a period of negotiation.

The Board believes the Scheme provides attractive value and certainty for CSR shareholders and is a validation of the successful execution of CSR's strategy."

CSR Managing Director and CEO, Julie Coates, said:

"We believe Saint-Gobain has strong strategic and cultural alignment with CSR and will support innovation in the Australian and New Zealand building products industry. The transaction also offers opportunities for our other stakeholders, including the CSR team and customers. Our focus remains on delivering outstanding building solutions for our customers and the building and construction markets in which we operate."

Details of the SID

The implementation of the Scheme is subject to various customary conditions. A copy of the SID, which sets out the terms and conditions of the Scheme and associated matters, is attached to this announcement. Capitalised terms used in this section below have the meaning given to those terms in the SID.

Conditions for implementation of the Scheme include (but are not limited to):

• the independent expert issuing a report that concludes that the Scheme is fair and reasonable and in the best interests of CSR shareholders (and not changing or withdrawing that conclusion);
• regulatory approvals including the Foreign Investment Review Board;
• approval of CSR shareholders and the Supreme Court of New South Wales;
• no Material Adverse Change to CSR;
• no Prescribed Occurrences; and
• certain other customary conditions.

The Scheme is not subject to any financing condition. The SID contains limited termination rights including that either party may terminate in the event of an unremedied material breach by the other party. CSR will be subject to customary exclusivity obligations, including no shop, no talk and no due diligence obligations (the latter two subject to a customary fiduciary exception), notification obligations and a matching right.

Indicative timetable and next steps

A Scheme Booklet containing information relating to the proposed acquisition under the Scheme, reasons for the CSR Directors' recommendation, an independent expert's report, and details of the Scheme meeting will be prepared and provided to the Australian Securities and Investments Commission for review, and subsequently sent to CSR shareholders.

Shareholders will have the opportunity to vote on the Scheme at a shareholder meeting. Implementation of the Scheme is then expected to occur in the first half of CSR's YEM2025 financial year.

CSR shareholders do not need to take any action at this point in time.

Additional information

CSR will host an audio webcast at 6.00pm AEDT today, Monday 26 February 2024. The webcast is available from CSR's website at www.csr.com.au or click here.

UBS Securities Australia Limited is acting as financial adviser and Herbert Smith Freehills as legal adviser to CSR.

This announcement has been authorised for release by the Board of Directors of CSR.

Analyst and investor enquiries: Media enquiries:

Bec Thompson Kate Inverarity
CSR Limited Investor Relations Nightingale Advisors
Tel: +61 416 079 329 +61 413 163 020
Email: [email protected][email protected]

ABOUT CSR LIMITED

CSR is a leading building products company in Australia and New Zealand and is the company behind some of Australia's most trusted and well-known building products brands, providing building products for residential and commercial construction. We operate low-cost manufacturing facilities and a strong distribution network to service our customers across Australia and New Zealand. CSR is also a joint venture participant in the Tomago aluminium smelter. CSR generates additional earnings from its Property division which focuses on maximising financial returns by remediating and developing surplus former manufacturing sites and industrial land for sale.

ABOUT SAINT-GOBAIN

Worldwide leader in light and sustainable construction, Saint-Gobain designs, manufactures and distributes materials and services for the construction and industrial markets. Its integrated solutions for the renovation of public and private buildings, light construction and the decarbonization of construction and industry are developed through a continuous innovation process and provide sustainability and performance. The Group's commitment is guided by its purpose, "MAKING THE WORLD A BETTER HOME".

[1]Based on total diluted shares outstanding of 480,306,609.

[2]Closing share price of $6.77 as at 20 February 2024, which is the last trading day prior to media speculation regarding a possible change of control proposal for CSR.

[3]Based on EBITDA of $370 million and EBIT of $284 million for the 12 months to September 2023. Enterprise value assumes balance sheet items as at 30 September 2023, including cash of $19 million, financial debt of $20 million, minority interests of $12 million, associates of $42 million, tax effected product liability of $131 million and lease liabilities of $154 million.

[4] The dividend is permitted to be up to 25 cents per share but is required to be fully franked.

Public link

Please use the above public link if you want to share this noodl on another website.