Cemex is under mounting pressure to sweeten its $16bn takeover bid for Rinker Group, amid speculation the Australian company is eyeing a potential tie-up with the UK construction materials group Hanson, according to local news reports.
The finance director of the Mexican cement group, Hector Medina, will face a daunting challenge convincing Rinker’s institutional shareholders to accept the bid when he arrives in Sydney next week.
Shares in Rinker rose 14c to $18.65 yesterday, well clear of the $US13 ($16.55) offer price, thanks partly to renewed speculation the company could seek a merger with Hanson, which itself was subject to persistent rumours during the year it could be taken over by Cemex.
The speculation has been fuelled by a meeting between Hanson chief executive Alan Murray and Rinker chairman John Morschel in Sydney last week.
But the seriousness of the discussions has been downplayed by Hanson management. One source close to the company said: "There’s just no story there." It was put that Mr Murray’s three-day Australian visit had been planned for months.
But some see a potential Rinker-Hanson tie-up as a handy strategy for both companies to ward off Cemex.
Rinker chairman John Morschel has hinted Rinker is in merger talks with several parties.
Rinker has argued Cemex could afford to lift its bid to $23 a share and still make the deal earnings positive. Independent expert Grant Samuel has valued Rinker between $20.58 and $23.04 a share.
In a research note, ABN Amro analyst Simon Thackray said he believed "speculation about a [Rinker]-Hanson merger will enter the mix on the back of this defence statement".
"Putting aside the merits of such a transaction, the higher [independent expert] report valuation can also be considered favourably for Hanson with its significant US aggregates position that would be complimentary to Rinker," he said.