The potential consummation of what would be the most expensive construction materials acquisition in history comes down to a May 18 deadline, by which
CP Staff
The potential consummation of what would be the most expensive construction materials acquisition in history comes down to a May 18 deadline, by which time Rinker Group shareholders must decide whether to accept a sweetened offer by Cemex S.A.B. de C.V. Measured by shares traded on the New York Stock Exchange, the offer equates to $79.25 per Rinker American depositary receipt (ADR). Compared to Cemex’s previous hostile takeover offer of $65/ADR (each ADR represents five Rinker Group Australian Stock Exchange-traded shares) from late October, this current bid is valued at approximately $15.3 billion.
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 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 the 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.