Fletcher bidder's statement reveals costs

Fletcher Building's bid for Australia's Crane Group will incur A$11 million ($14.76 million) of transaction costs.

Any change in control of Crane will also trigger employee rights at an estimated cost of A$16 million.

The combined group will incur A$28 million of interest costs each year from the debt taken on to fund the deal assuming an interest rate of 7.75 per cent per annum.

These are some of the figures disclosed in the bidder's statement Fletcher Building filed for its previously announced A$740 million bid for the Australian plumbing and building supplies firm.

Crane is rejecting the offer but must now prepare a formal target statement.

Fletcher Building has not done due diligence on Crane and is using publicly available information for its analysis of the bid's benefits.

The statement does not put a number on potential synergy benefits because of this.

Fletcher Building may offer to pay a commission to brokers who solicit acceptances of the offer from their clients, but it has not made a final decision yet.

If Fletcher Building is successful the gearing ratio of the combined group will be 33.1 per cent.

"This will leave Fletcher Building's balance sheet in a strong position and enable Fletcher Building to maintain prudent headroom given the remaining uncertainty in financial markets and will also preserve capacity for Fletcher Building to pursue further organic growth and acquisition opportunities which meet its investment criteria," the bidder's statement said.

Fletcher Building holds 14.9 per cent of which 13.1 per cent was acquired from Crane's four largest institutional shareholders.