Rinker's Top Investor Says It Will Accept CEMEX Buyout
Cemex’s bid to acquire rival Rinker Group Ltd. (RIN. AX, NYSE: RIN) has the high drama of a John Grisham novel, with as many plot twists and turns. On May 4, Rinker investors held back from accepting Cemex’s unsolicited $14.25-billion offer, apparently believing that the Mexican firm undervalued the Sydney-based company amid expectations of a recovering U.S. housing market later this year. The company reported better-than-expected earnings on April 30, and said that profit in the current year may fall less than 10% as it counters a housing slump with road and infrastructure work.
The Mexican cement giant’s cash offer of $15.85-per-share was due to expire Mar. 30, but was extended until April 27. Yet Cemex (NYSE: CX) said it has only garnered 1.7% of the stock, only a fraction of the 90% minimum acceptance condition, despite Rinker board’s April 11 recommendation. Cemex has since raised last year's offer of $13-a-share by 22%.