Rinker (RIN) Share Trading Update

Submitted by Craig Strzelecki on 23 March, 2007 - 18:04

Rinker (RIN) has had their US$11.7 billion takeover bid extended by Cemex to to 7pm on April 27,2007. Shares in RIN have slumped about 7 percent from their mid-February highs as investors exited the stock on fears that Cemex would walk away from the takeover deal. Stock analyst Macquarie Research Equities continues to believe that the current bid is too low, and Cemex will have to increase the bid if it wants Rinker's assets. The extension of the offer should not come as a surprise given the delay in the Department of Justice's decision on competition issues in the US. The only certainty at this stage is that the bid of $US13.00ps is too low, which at current exchange rates translates to A$16.25ps. Taking synergies into account, the stock analyst believes that a bid above A$20.00 is a fair price for RIN given the strategic nature of its assets. To this end, Cemex will have to increase the bid if it wants Rinker's assets. If Cemex were to walk away, analyst thinks the stock will come back but they are confident that it will fall into the A$17-18ps range. MRE maintain their outperform broker call on Rinker. The 4Q07 result looks like it is going to be weak but with volumes crashing, this should not come as a major surprise. Future pricing will be more important, particularly if volumes remain down. The real focus over the next few months will be the CEMEX bid. The analyst feels Rinker did enough in the 3Q07 result to ensure a bid above A$20.00ps is achieved.

Rinker Limited is listed on the Australian Stock Exchange (ASX) under stock code RIN. You can view their investor website here. RIn was listed on the ASX on 31 March, 2003. John Morschel is the Chairman and David Clarke is the CEO of Rinker. The company manufactures and supplies heavy building materials in the United States and Australia. Rinker is one of the world's top 10 international construction materials companies with operations supplying aggregate, cement, concrete, concrete block, asphalt, concrete pipe and other construction materials to over 34,000 valued customers. Around 85 per cent of the group earnings come from Rinker Materials in the US. Find out the meaning of the recommendations in this primer. Browse for other stockbroker recommendations. You can use Instalment Warrants to trade RIN. Check your charts and good luck with your share trading!