There’s at least one Rinker Group shareholder which listened to the company’s honest forecast of a possible dip in 2008 earnings, looked at the latest figures on housing and real estate from the US, sawa change in the offer from Cemex and pulled the plug, accepting the offer from the Mexican giant and almost certainly guaranteeing the success of the offer.
Perpetual Trustees, which owned around 10.5 per cent of Rinker, yesterday accepted the Cemex offer after it was extended to June and shareholders were allowed to keep the final dividend of 25c a share.
That’s an effective increase in the price to around $19.60 or more (depending on exchange rates).
Cemex also cut the level of acceptances needed for a successful bid from 90 per cent to 50 per cent, and extended its bid for a fifth time to June 8.
Shares in Rinker rose after Perpetual, whose stake in Rinker had been enough to block the offer, said it planned to accept the amended offer “as soon as practicable”.
Perpetual’s stance was being watched by many other RIN shareholders, large and small and they will now be expected to follow suit, giving Cemex control.
Rinker shares rose almost two per cent at $19.23 yesterday after the PPT news. That was below the offer price of about $19.34 a share, based on the US dollar bid price of $US15.85 a share at current exchange rates.
Cemex also said in a statement that shareholders could keep Rinker’s final dividend, irrespective of when they accepted Cemex’s offer.
The Cemex announcement and Perpetual decision came within hours of the confusion over the fate of the smaller, $11.1 billion bid for Qantas.
Perpetual’s stance will also give heart to those trying to takeover APN News and Media where it has been blocking the bid with at least one other shareholder.
Perpetual had knocked back Cemex’s original $US13 a share offer made last October as too low and supported the Rinker management in their opposition.
That changed in the middle of April when the board said shareholders should accept a higher offer (to $US15.85 a share) because all attempts to find a deal with a similar return had failed.
Additionally the board, ten days ago, cast doubt on the company’s earnings for 2008-09 when, in releasing solid earnings for the 2007 year, said that if the US housing industry’s slump continued at its current levels, the company was looking at a 10 per cent fall in profits.
It’s interesting that the Perpetual offer came so quickly after the collapse of the Qantas bid.
Perhaps Perpetual didn’t want to be locked in or cast in a bad light seeing it had more than a billion dollars of profits locked in at the higher Cemex price.
Under the revised bid for Rinker from Cemex, RIN shareholders also have the option to receive $19.50 a share for a maximum 2,000 shares after the Australian currency’s gain against the US dollar cut the value of the bid. (Remember the $US15.85 is worth around $A19.34, give or take a cent or two.)
