Why Shares in This Housing Market Products Company Crashed This Week
Shares in fiber cement siding company James Hardie Industries (NYSE: JHX) declined by 15.8% in the week to Friday morning. There's no doubt why the move occurred; the announcement of an agreement to combine with outdoor decking company Azek (NYSE: AZEK) on Monday sent the shares sharply lower. However, there's a debate over whether the move downward is justified.There are two concerns over the deal: the price and the fact that James Hardie is buying an asset in an industry that's continuing to be challenged by relatively high interest rates.The company is acquiring Azek in a combination of shares and cash with a total transaction value of $8.75 billion based on James Hardie's share price on March 21. Ultimately, James Hardie shareholders will end up with 74% of the combined company, and Azek shareholders will end up with 26%Continue reading
Shares in fiber cement siding company James Hardie Industries (NYSE: JHX) declined by 15.8% in the week to Friday morning. There's no doubt why the move occurred; the announcement of an agreement to combine with outdoor decking company Azek (NYSE: AZEK) on Monday sent the shares sharply lower. However, there's a debate over whether the move downward is justified.
There are two concerns over the deal: the price and the fact that James Hardie is buying an asset in an industry that's continuing to be challenged by relatively high interest rates.
The company is acquiring Azek in a combination of shares and cash with a total transaction value of $8.75 billion based on James Hardie's share price on March 21. Ultimately, James Hardie shareholders will end up with 74% of the combined company, and Azek shareholders will end up with 26%
