Cemex unlikely to raise bid for Rinker

Cemex unlikely to raise bid for Rinker
Published: 02 April 2007

Experts are becoming increasingly concerned about the likelihood of success for Cemex in its battle for Rinker Group, with a the brokering community generally believing that a share offer greater than US$13 per share will be needed.

A deal which saw Vulcan Materials’ buy out Florida Rock last month for the equivalent of 11.3 times enterprise value has increased pressure on Cemex to raise its bid closer to the US$19.83 target price sharemarket analysts believe it can achieve.

Deutsche Bank analyst Emily Smith said in a note to clients last month that Cemex may be precluded from increasing its offer by its strict acquisition criteria.

ABN Amro Asset Management’s head of equities, George Clapham, said that although the numbers have been weaker than was expected, the outcome will depend ’on how desperately Cemex want it’.