CEMEX to Lift Takeover Offer for Rinker to US$15.85
10 Aprile 2007 - 3:00PM
PR Newswire (US)
Rinker Board Recommends Shareholders Accept the Higher Offer in the
Absence of a Superior Proposal SYDNEY, Australia, April 10
/Xinhua-PRNewswire-FirstCall/ -- The directors of Rinker Group
Limited ("Rinker") (ASX:RIN)(NYSE:RIN) today announced that CEMEX
S.A.B. de C.V ("CEMEX") has agreed to lift its cash takeover offer
from US$13.00 to US$15.85 per Rinker ordinary share. The higher
price represents an increase over the original bid price of US$2.85
or 22%, or an increase of US$2.98 or 23%1, assuming CEMEX had
exercised its right to deduct the 13 US cents interim dividend1
(for the year ending March 2007, or YEM07) from the original offer
price. For American Depositary Receipt holders, the higher offer
represents US$79.25 per ADR -- US$14.90 or 23%1 above the initial
CEMEX offer. The higher offer is equivalent to A$19.41(2) per
Rinker ordinary share at the current A$-US$ exchange rate, or
A$3.65(1) above the initial offer. It is within the US$15.85 --
US$17.74 valuation range of the Independent Expert's Report,
included in the Target's Statement distributed to shareholders in
November 2006 (3). The increased CEMEX offer represents: -- a 40%
premium(2) to the Rinker A$ ordinary share price on 26 October
2006, the day before CEMEX launched their takeover bid -- a 50%
premium to the ordinary share price, calculated in US$, on 26
October 2006 (4) -- a 48% premium to the US ADR price on 26 October
2006 -- a multiple of 10.4x EV/EBITDA (based on EBITDA for the 12
months to 31 December 2006) (5), and -- a 5% premium to the closing
share price on 5 April 2007, before the Australian Stock Exchange
closed for the Easter break. In relation to the Rinker YEM07
interim dividend of 16 Australian cents/13 US cents(2) per ordinary
share (80 Australian cents / 65 US cents per ADR(2)), which was
paid on 11 December last year, CEMEX's initial offer entitled CEMEX
to deduct dividends paid during the offer period from the offer
price. However, CEMEX has agreed not to reduce the higher US$15.85
offer by the amount of the interim dividend. CEMEX also announced
its intention, subject to obtaining any necessary ASIC
modifications or Takeovers Panel approval, to give existing
shareholders (for ordinary shares purchased prior to today's date),
the option of a fixed Australian dollar price of A$19.50 per share,
for their first 2,000 ordinary shares. CEMEX has also agreed to
waive all conditions to the bid, except the 90% minimum acceptance
condition. If the required level of acceptances is not reached, the
offer will lapse unless this condition is waived. CEMEX has
described the offer as "best and final", in the absence of a
superior proposal. Any Rinker shareholders who have already
accepted the initial CEMEX offer will be eligible for the increased
offer consideration announced today. Rinker directors concluded
unanimously that it is in the best interests of shareholders to
recommend -- in the absence of a superior proposal -- that
shareholders accept the increased CEMEX offer. Rinker directors
intend to accept the higher offer for their own Rinker shares, in
the absence of a superior proposal. Rinker chairman John Morschel
said: "This recommendation has been made after careful
consideration of available alternatives, and was not taken lightly.
Over the past five months, Rinker directors and senior management
have reviewed available options, with one objective in mind -- to
maximise value for shareholders." He said potential alternatives
included transactions with industry participants and private equity
investors, as well as a corporate restructure, involving the
potential demerger of Rinker's Australian subsidiary, trading as
Readymix, and the re-domicile of Rinker to the US. "Despite the
temporary downturn in US residential construction, Rinker's profit
result for YEM07 is expected to be within the guidance previously
advised to the market. Whilst Rinker directors remain confident
about the long term prospects of the Rinker business, the impact of
the downturn on the current financial year (YEM08) is difficult to
predict," said Mr Morschel. "In light of the above, and following
evaluation of the available alternatives -- including relevant
regulatory, timing and other execution risks -- directors concluded
that, in the absence of a superior proposal, the higher CEMEX cash
offer represents the best risk-adjusted return for shareholders.
Directors also took into account that if the CEMEX offer was
withdrawn, the Rinker share price may fall," he said. "On behalf of
the directors, I would like to thank our employees for their
exceptional performance in delivering Rinker's outstanding results
in the four years since the demerger (6). This has seen our A$
share price increase almost 295%, with a total shareholder return
of 332% over that period (7), and created the value that CEMEX has
recognised with this takeover bid. I would also like to thank our
shareholders for their loyalty, support and encouragement." The
CEMEX offer is currently scheduled to close at 7.00pm (Sydney time)
on 18 May 2007 and 5.00am (New York time) on 18 May 2007, following
a further extension announced today. Full details of CEMEX's higher
offer will be set out in a fourth Supplementary Bidder's Statement,
expected to be mailed to shareholders shortly. The Rinker board's
recommendation in relation to the higher offer will be issued in a
Supplementary Target's Statement, which will also be mailed to
shareholders. Shareholders are encouraged to read both of these
documents and, if they consider it appropriate, seek professional
advice before deciding how to respond to CEMEX's higher offer. If
they have any questions, Rinker shareholders should call the Rinker
Shareholder Information Line(8) during normal working hours on 1800
285 948 (toll-free in Australia), +61 2 9207 3855 (outside
Australia) or 1 866 454 3170 (toll-free in the US). A copy of the
Bid Agreement between CEMEX and Rinker will be separately filed
with the ASX. Notes 1. Assuming CEMEX had exercised its right to
reduce the offer price by the interim dividend of A$0.16 per Rinker
ordinary share or US$0.13 per Rinker ordinary share, based on the
Reserve Bank Mid-Point Rate on 5 April 2007 of A$1.00 to US$0.8167.
2. Based on the Reserve Bank Mid-Point Rate on 5 April 2007 of
A$1.00 to US$0.8167. 3. Following a review of current exchange
rates, recent Rinker trading results and the impact that has on
Rinker's expected future performance and other relevant factors,
the Independent Expert has verbally advised that the US$15.85 per
share offer remains within their US$ valuation range. Further
information will be included with the Supplementary Target's
Statement to be mailed to shareholders shortly. 4. Based on the
Reserve Bank Mid-Point Rate on 26 October 2006 of A$1.00 to
US$0.7627. 5. Reconciliation of EBIT and EBITDA for the year ended
31 December 2006 EBIT represents profit before finance and income
tax expense. EBITDA represents EBIT before Depreciation and
Amortization. Year ended 31 December US$ EBIT 1,248 Depreciation
and Amortization 220 EBITDA 1,468 6. Rinker Group Limited was
demerged from CSR Limited on 31 March 2003. 7. Measured in US$, the
equivalent increase in the Rinker ordinary share price is 408%
while total shareholder return (which includes capital returns and
dividends) increased 485% from demerger to the closing share price
on 5 April 2007, based on London end-of-day exchange rates (source:
Bloomberg). 8. As required by the Corporations Act, calls to the
Shareholder Information Line will be tape recorded and such
recordings will be indexed and stored. Important Legal Information
This communication has been made public by Rinker Group Limited
("Rinker"). Investors are urged to read Rinker'sTarget's Statement
and Solicitation/Recommendation Statement on Schedule 14D-9
(including each exhibit thereto), which was filed by Rinker with
the U.S. Securities and Exchange Commission (the "SEC") on November
28, 2006, and all amendments thereto, as they contain important
information. Copies of the Solicitation/Recommendation Statement
(including this Target's Statement and the other exhibits thereto)
are, and other public filings made from time to time by Rinker with
the SEC which are related to the offer (the "Offer") by CEMEX
Australia Pty Ltd, a wholly-owned subsidiary of CEMEX S.A.B. de
C.V., will be available without charge at the SEC's website at
http://www.sec.gov/ or at Rinker's' website at
http://www.rinkergroup.com/. This communication contains a number
of forward-looking statements based on management's current views,
expectations and beliefs as of the date of this communication. Such
statements can be identified by the use of forward- looking
language such as "may," "should," "expect," "anticipate,"
"estimate," "scheduled," or "continue" or the negative thereof or
comparable terminology. Such forward-looking statements are not
guarantees of future results or performance and involve risks,
uncertainties and other factors, including: the general economic
and business conditions in the United States and Australia; trends
and business conditions in the building and construction
industries; the timing and amount of federal, state and local
funding for infrastructure; competition from other suppliers in the
industries in which Rinker operates; changes in Rinker's strategies
and plans regarding its ongoing business strategy, acquisitions,
dispositions and business development; Rinker's ability to
efficiently integrate past and future acquisitions; compliance
with, and potential changes to, governmental regulations related to
the environment, employee safety and welfare and other matters
related to Rinker; changes in interest rates, weather and other
natural phenomena, energy costs, pension costs; healthcare costs;
outcomes of legal hearings such as the Lake Belt challenge and
other risks and uncertainties identified in our filings with the
Australian Stock Exchange and the SEC. Rinker can give no
assurances that actual results would not differ materially from any
forward-looking statements contained in this communication,
particularly in light of the many risks and uncertainties regarding
the Offer. None of Rinker, Rinker's officers, any persons named in
the Target's Statement with their consent or any person involved in
the preparation of the Target's Statement makes any representation
or warranty (express or implied) as to the accuracy or likelihood
of fulfilment of any forward-looking statement, or any events or
results expressed or implied in any forward-looking statement,
except to the extent required by law. You are cautioned not to
place undue reliance on any forward-looking information. For
further information, please contact Debra Stirling Vice President
Corporate Affairs & Investor Relations Tel: +61-2-9412-6680 or
+61-419-476-546 DATASOURCE: Rinker Group Limited CONTACT: Debra
Stirling of Rinker Group Limited, +61-2-9412-6680, or
+61-419-476-546 Web site: http://www.rinker.com/
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