Cemex to appeal panel decision on Rinker

Cemex to appeal panel decision on Rinker
Published: 16 July 2007

Cemex has received a rap over the knuckles on the eve of completing its A$17 billion takeover for Rinker Group. The company is appealing against an order issued by the Takeovers Panel late on Friday that it pay up to A$10 million to Rinker shareholders who sold into the bid between April 10 and May 7, when Cemex announced it would allow Rinker shareholders to retain a fully-franked 25c dividend declared by the Australian company.

In response to a complaint filed by the Australian Securities and Investments Commission, the panel ruled that Cemex’s declaration that its bid was "best and final" on April 10 had misled Rinker shareholders into thinking they would not receive anything extra out of the bid.

"The panel considers that the terms of the April 10 announcement would leave shareholders to conclude that the bid consideration would not be improved further," it said in its findings. The panel added that "the acquisition of control over Rinker shares did not take place in an efficient, competitive and informed market".

On May 7 Cemex held 3.24 per cent of Rinker or 28.9 million shares. But a Cemex spokesman said the amount owing would be less than A$10 million. The panel has ordered the amount be paid within two weeks.

Cemex said the ruling would not affect its takeover which is due to conclude at 7 pm this evening. The company now has a 93 per cent stake in Rinker, which will allow it to go on to compulsory acquisition of the rest.

The Takeovers Panel said its order would be stayed pending a review of its decision. "Cemex believes that the market was fully informed by its announcements on April 10, 2007 and notes that the Takeovers Panel has made no finding that Cemex breached any law," the Mexican company said.

However, the panel did note that Cemex had breached "truth in takeovers", the cornerstone principle in how companies in Australia should conduct themselves during takeovers.