Mexican cement producer, Cemex, says it remains confident of securing the required support for its US$15.85-a-share takeover offer for construction materials company, Rinker. Cemex’s senior vice-president of planning and finance, Juan Pablo San Agustin, has begun a series of meetings with 15 key institutions in Sydney. A crucial one will be with 10.3 per cent Rinker shareholder and potential dealbreaker Perpetual Investments, which is yet to declare its hand. ’Right now I don’t see why we wouldn’t succeed, Mr San Agustin said. However, Goldman Sachs JBWere analyst, Matthew McNee, said yesterday Cemex’s offer wasn’t good enough following the release of Friday’s slightly better than expected profit figures.
Cemex has sent a team to Australia to press the flesh with 15 of Rinker’s major shareholders and drum up support for its $18
billion hostile takeover bid.
Not that they’ll need much convincing, says Cemex’s head of strategy Juan Pablo San Agustin.
He told BusinessDaily that since Rinker’s board, led by chairman John Morschel, had endorsed the sweetened $US15.85 a share offer, he and his colleagues were simply in town to "close the loop".
"Since we launched the offer, the feedback from all the major shareholders is that the opinion of the board is really important," he said. "Now the board of Rinker has recommended shareholders accept the offer, so I would expect everybody to follow their advice." Having said that, Perpetual Investments, which has the ability to block the bid with its 10.5 per cent, is still making up its mind.
The Cemex camp will meet with Perpetual today to "answer any final questions". Some that could crop up involve being asked to sell at the bottom of the US housing cycle and at a point when the US dollar is at a 16-year low against its Aussie counterpart.
Analysts also note that Rinker has unique exposure to high-growth states and "irreplaceable" quarry assets that are likely to become more valuable. Cemex’s San Agustin is unfazed, saying housing cycles ebb and flow, and shareholders know all about exposure to the greenback, given most of Rinker’s earnings are in US dollars.