Cemex lowers level of acceptance on Rinker bid
May, 10 2007
(SYDNEY, Australia) - Mexico's Cemex looked to have sealed its $14 billion takeover of Australian building materials maker Rinker Group Ltd. on Monday, analysts said, after a key investor moved to accept the offer.
Cemex, the world's No. 3 cement maker, also lowered the level of acceptances needed for a successful bid from 90 percent to 50 percent, and extended its bid for a fifth time to June 8.
Shares in Rinker jumped over 2 percent after Australian fund manager Perpetual, whose 10.5 percent stake in Rinker had been enough to block the offer, said on Monday it planned to accept the amended offer "as soon as practicable".
"The acceptance by the major shareholder will be a catalyst for other acceptances," said ABN AMRO analyst Simon Thackray.
"Everybody's assuming it's done."
Rinker shares were trading up 1.8 percent at A$19.23 by 0304 GMT, below the offer price of about A$19.34 a share, based on the U.S. dollar bid price of $15.85 a share at current exchange rates.
Cemex also said in a statement that shareholders could keep Rinker's final A$0.25 cents a share dividend, irrespective of when they accepted Cemex's offer.
The Cemex announcement comes as takeover bids for a number of Australian companies encounter stiff shareholder resistance, including failed high profile bids for Flight Centre Ltd. and Qantas Airways Ltd.
Perpetual was not immediately available for comment. The fund manager had rejected Cemex's original $13 a share offer made last October as too low, along with Rinker management. It had made no public comment on the revised offer.
Thackray said there was a chance Cemex, which last Friday said it held 1.66 percent of Rinker shares, might not hit the 50 percent acceptance level by the new June deadline.
"But that's not a problem for them because they can extend all the way out to October if they have to," he said. "Cemex are under very little pressure from here."
Buying Rinker will beef up Cemex's presence in the United States, which accounts for 80 percent of the Australian company's revenue, and give it a foothold in China.
Rinker has been hurt by continued poor conditions in the United States, and last month recommended shareholders accept the sweetened offer.
Rinker also posted a fall in quarterly earnings in April, warning tough conditions in the U.S. housing market would keep profits steady or push them lower in fiscal 2008.
"The acceptance by Perpetual tells you something about the housing outlook for the next couple of years," said Thackray. ($1=A$1.22)
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