By Cecile Vannucci

(Bloomberg) -- A block of bearish James Hardie Industries Plc options changed hands before shares of the Australian building-products producer sank on news that it would buy Chicago-based AZEK Co.

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A block of 3,000 James Hardie A$43 puts expiring in May traded late Friday for A$14 million in notional value, data compiled by Bloomberg show. The position was new, with an exercise price 8.1% below that day’s closing share level, and represented about one-fifth of the 20-day average stock volume.

On Monday, James Hardie’s shares slumped 15% to A$40 after the deal’s announcement as the options jumped 177% in value.

For the company, which already generates three-fourths of its revenue from North America, the agreement represents an even larger bet on the US housing market amid economic uncertainty fueled by President Donald Trump’s policies. Its chief executive officer defended the deal, saying he was focused on longer-term opportunities.

Also read: James Hardie CEO Defends $8.75 Billion AZEK Deal as Stock Slumps

James Hardie’s shares had been under pressure. The stock posted its biggest two-day plunge in 10 months last week and closed at its lowest price since July on Thursday — just before the bearish bet was made. That day, put volume reached the highest level of the year.

(Updates to include relative size of options trade and closing levels in second and third paragraphs.)

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