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 Business News | October 2006 
Australia's Rinker Rejects 12.9 Billion Dollar Bid by Mexico's Cemex
 AFP
| | Cemex senior vice president of planning and finance, Juan Pablo San Agustin, at a press conference in Sydney. Australian construction materials company Rinker Group Ltd said its board had rejected a 16.8 billion dollar (12.9 billion US) hostile takeover bid by Mexico's Cemex SAB de CV. (AFP/Greg Wood) |
Australian construction materials company Rinker Group Ltd said its board had rejected a 16.8 billion dollar (12.9 billion US) hostile takeover bid by Mexico's Cemex SAB de CV.
Rinker said Monday that after an initial review the board believed the bid - the biggest cash offer ever made for an Australian company - undervalued the business, was opportunistic and highly conditional.
Cemex announced its offer of 13.00 US dollars per share, equivalent to 17.00 Australian dollars and a 26 percent premium to Rinker's three-month average share price, after the market closed on Friday.
Rinker chairman John Morschel said the Cemex announcement indicated that the unsolicited hostile offer would be highly conditional.
"The preliminary view of the Rinker board is that the proposed offer is opportunistic and materially undervalues the company," he said.
Morschel said Rinker's 40 percent compound annual growth in earnings per share over the past five years made it one of the best performing construction materials companies in the world.
He said shareholders should take no action in relation to Cemex's bid until directors make a formal recommendation after evaluating the offer.
Rinker has retained UBS as its financial adviser.
Cemex said the merger would create one of the world's largest construction materials group.
It said the two companies have complementary businesses in the US where Rinker earns about 80 percent of its income.
Cemex senior vice president of planning and finance, Juan Pablo San Agustin, told reporters in Sydney later that the bid provided full value.
"We think we are fully valuing what Rinker is worth," he said.
"Regarding intentions by other people to jump in, we don't think that will be the case ... because we think our offer is fully attractive to Rinker's shareholders," he said.
Rinker shares soared 26.46 percent on the Australian stock exchange Monday to end at 18.59 dollars after earlier trading to a high of 18.90. |
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