Rinker Board Heeds Enriched Cemex Bid

Sources: Cemex S.A.B. de C.V., Monterrey, Mexico; Rinker Group, Sydney; CP staff After sweetening its bid by more than 20 percent, Cemex appears much closer to consummating a Rinker takeover.

Sources: Cemex S.A.B. de C.V., Monterrey, Mexico; Rinker Group, Sydney; CP staff After sweetening its bid by more than 20 percent, Cemex appears much closer to consummating a Rinker takeover. A revised offer announced April 9 equates to $79.25 per Rinker American depositary receipt (ADR), versus an initial $65/ADR offer from late October. (New York Stock Exchange-traded ADRs represent five Rinker Group Australian Stock Exchange-traded shares.)

The deal would afford Cemex a U.S. franchise with annual sales upward of $8 billion. The company would have an integrated ready mixed, block, aggregate and cement platform with more than 700 sites spanning the Carolinas, Sunbelt, and Pacific Northwest, plus a 49-plant, coast-to-coast concrete pipe and precast business.

Dubbed by Cemex as “best and final,” the offer runs through May 18 and includes a host of conditions that favor Rinker shareholders by waiving certain terms of the original takeover bid. Rinker’s board recommended that shareholders accept revised overture “in the absence of a superior proposal.” Directors had held firm on a recommendation that shareholders reject the $65/ADR level bid, a position supported by post-October trading activity that valued the ADR in the $70-$77 range. Cemex’s revised bid is slightly less than Rinker ADR’s all-time high, $83, set in May 2006. Nevertheless, it is nearly 350 percent higher than the split-adjusted $23/ADR with which Rinker opened trading on the New York Stock Exchange in October 2003.