RIN - Rinker Group

Julia said:

I can understand those of you who have sold this morning. I was tempted to do the same, but decided it was a bit premature in view of no official statement from the RIN board yet. Of course, if they outright reject it and leave no room for increased offer, then I'll be sorry and will revert to a long term hold. Article from the SMH today.

http://www.smh.com.au/articles/2006/10/29/1162056866586.html

Julia

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Hi Julia, I sold at $18.65 - 67 and I can't see more than $20 tops on this one and maybe only $19. These matters can be dragged out for a long while and I find it very laborious. All the best

noirua said:

Hi Julia, I sold at $18.65 - 67 and I can't see more than $20 tops on this one and maybe only $19. These matters can be dragged out for a long while and I find it very laborious. All the best

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Hi, I also just sold out at $18.55 for the same reasons. Only held for 10 weeks. Can't sneeze at 43% gain in that short a period. "Bird in the hand ....." , you know.
Regards YN.

I sold all RIN CFDs which I bought last friday. Don't want to risk too much daily interest. I also sold 1/3 of my RIN shares bought 2 weeks ago, and still hold 2/3, expecting another bid to come.

Ferret said:

I bought some in my super fund two months ago for just over $13. At that price it was cheap on fundamentals looked like a good buy and hold for a super fund.

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Shame on myself. I didn't buy more RIN. The buying did cross my mind but my indicators did not show a buy sign yet and I was busy checking on other stocks first. Never mind (consolation to me-self).

Realist said:

Yep, it was a Buffet special, a large successful company with huge US exposure that makes great profits that dipped quite significantly on bad news. Get it cheap and hold. I've got dividends and the takeover is a huge bonus.

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yes correct, has to be a good price as well

e.g. if u bought RIN at 20+....

thx

MS

Another article on the takeover.

http://www.smh.com.au/articles/2006/10/30/1162056894363.html

Julia

SP down this morning. I got cold feet and sold on the open at 18.48.

Will anyone who has sold be considering buying back in temporarily or long term if the ante is upped, as seems to be indicated may well happen from the following.

http://www.aireview.com.au/index.php?act=view&catid=8&id=4609&setSub=1

Julia

I ran some numbers this morning and I am wondering how Cemex is going to pay for Rinker. Below is there balance sheet and profit/loss statement with FY05 being the first column, Fy04 the second and Fy03 the third. The company is already 8 billion in long term debt and even if they buy rinker at $18 a share that equates to 18 * 900,000,000 shares that equals 16.2 billion Australian or about 0.8 *16.2 = 12.96 billion US. This is going to be one very heavily leverage company with yearly income equivalent to 2 billion dollars. The interest alone on 20 billion @ 5% is 1 billion. While Rinker will bring 1 billion in cash flow also the company will be covering it loan but not much else. I know I would be a little concerned owning cemex especially if there are any more interest rate hikes in America.


Assets
Current Assets
Cash And Cash Equivalents 593,991 144,928 291,811
Short Term Investments - 197,143 -
Net Receivables 2,436,321 759,409 831,410
Inventory 1,084,845 632,098 630,712
Other Current Assets - 216,617 75,174

Total Current Assets 4,115,157 1,950,195 1,829,107
Long Term Investments 1,539,894 1,840,599 264,957
Property Plant and Equipment 15,773,079 9,553,884 9,610,219
Goodwill 4,882,965 3,878,780 3,871,707
Intangible Assets 116,994 178,404 242,610
Accumulated Amortization - 165,245 -
Other Assets 37,293 278,402 (112,810)
Deferred Long Term Asset Charges 924,327 355,508 162,492

Total Assets 27,389,709 17,870,527 15,868,282

Liabilities
Current Liabilities
Accounts Payable 2,140,860 1,046,108 1,502,582
Short/Current Long Term Debt 1,310,928 1,042,942 1,330,958
Other Current Liabilities 611,196 321,521 -

Total Current Liabilities 4,062,984 2,410,571 2,833,540
Long Term Debt 8,360,886 5,214,288 4,543,565
Other Liabilities 1,375,656 378,875 831,169
Deferred Long Term Liability Charges 2,698,953 1,150,699 1,323,108
Minority Interest 532,797 406,915 -
Negative Goodwill - - -

Total Liabilities 17,031,276 9,561,347 9,531,383

Stockholders' Equity
Misc Stocks Options Warrants - - -
Redeemable Preferred Stock - - -
Preferred Stock - - -
Common Stock 353,307 330,661 311,422
Retained Earnings 3,425,841 4,333,246 3,216,474
Treasury Stock - - -
Capital Surplus 4,383,369 3,708,180 3,227,140
Other Stockholder Equity 2,195,916 (62,907) (418,137)

Profit/ loss Statement
Total Revenue 15,131,937 8,143,316 7,175,018
Cost of Revenue 9,156,780 4,582,943 4,136,173

Gross Profit 5,975,157 3,560,372 3,038,845

Operating Expenses
Research Development - - -
Selling General and Administrative 3,519,120 1,710,068 1,581,472
Non Recurring - - -
Others (1,674) (80,954) (177,772)

Total Operating Expenses - - -


Operating Income or Loss 2,457,711 1,931,259 1,635,145

Income from Continuing Operations
Total Other Income/Expenses Net (83,700) (186,361) (727,288)
Earnings Before Interest And Taxes 2,439,483 1,744,898 897,959
Interest Expense - - 4,072
Income Before Tax 2,439,483 1,744,898 893,887
Income Tax Expense 350,052 148,983 95,248
Minority Interest (53,568) (23,744) (48,221)

Net Income From Continuing Ops 2,056,695 1,611,496 794,273

Non-recurring Events
Discontinued Operations - - -
Extraordinary Items - - -
Effect Of Accounting Changes - - (57,086)
Other Items - - -


Net Income 2,056,695 1,611,496 737,187
Preferred Stock And Other Adjustments - - -

Net Income Applicable To Common Shares $2,056,695 $1,611,496 $737,187


Total Stockholder Equity 10,358,433 8,309,180 6,336,899

Net Tangible Assets $5,358,474 $4,251,995 $2,222,582

Good read from Bloomberg... pretty much says that Cemex are going to get nowhere with their current bid.

http://www.bloomberg.com/apps/news?pid=20601081&sid=a9UkdMOTkBnw&refer=australia

Just an observation .... up to Sep/Oct the analysts price targets, valuation etc.... for RIN was average about $15 no more than $16, with a bleak future over the next year or so.... similar was quoted in this forum.
Suddenly... they hear of a $17 takeover, the same analysts start screaming no..no...no... its worth at least $20+.... even though they themselves were saying the other day its not worth more than $16 -$17….

Why the change ??? …. is this a reflection of pure opportunistic greed personally motivated by self gains & commissions,(incl. Perpetual who bought 10.6% precisely, just before the takeover bid !!!) ... I cant help but feel that analysts are no better than car salesmen......and the true value of the company is lost in this rubble of crap

I use ETrade ..... in May 06 their Recommendation (11 analysts) was over 80% Strong/Mod Buy at $20-21, a few weeks later when RIN dived 30% to $12- 13, there Recommendation was ....wait !!!! .... over 80% Strong/Mod Buy ….. good advise !!!!!! …I would recommend them to my mother .... sure !!!

JAK said:

Just an observation .... up to Sep/Oct the analysts price targets, valuation etc.... for RIN was average about $15 no more than $16, with a bleak future over the next year or so.... similar was quoted in this forum.
Suddenly... they hear of a $17 takeover, the same analysts start screaming no..no...no... its worth at least $20+.... even though they themselves were saying the other day its not worth more than $16 -$17….

Why the change ??? …. is this a reflection of pure opportunistic greed personally motivated by self gains & commissions,(incl. Perpetual who bought 10.6% precisely, just before the takeover bid !!!) ... I cant help but feel that analysts are no better than car salesmen......and the true value of the company is lost in this rubble of crap

I use ETrade ..... in May 06 their Recommendation (11 analysts) was over 80% Strong/Mod Buy at $20-21, a few weeks later when RIN dived 30% to $12- 13, there Recommendation was ....wait !!!! .... over 80% Strong/Mod Buy ….. good advise !!!!!! …I would recommend them to my mother .... sure !!!

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I also noticed this when Coles Myer was approached by KKR. Could it be that the investment banks that these analysts work for also hold the stock and are wanting to 'squeeze' more out of the sp? Or like you said about commissions... these banks make a lot of money from 'clipping' trades, especially their institutional trading desks. Sure, there's all this talk about there being Chinese walls present, but who believes this works 100% of the time?

About RIN, from the articles that I've read, I really don't think RIN is going to be easily taken over. Also, Cemex have the capacity to pay well over $20 per share and they're going to have to by the sounds of it.

Suggestion here that Cemex has the capacity to pay well over $17 for RIN.

http://www.smh.com.au/articles/2006/11/02/1162339946089.html

I see it's down 18c today but that could be simply reflection of the overall market.

Julia

Cemex could up Rinker bid based on funding-report
Wed Nov 1, 2006

NEW YORK, Nov 1 (Reuters) - Mexican cement maker Cemex could raise its bid for Australia's Rinker Group Ltd. by almost 14 percent, based on financing it has arranged for the deal, a research report said on Wednesday.

In a bidder's statement filed on Tuesday with the U.S. Securities and Exchange Commission, Cemex said it would need $11.64 billion to complete its all-cash offer for the building materials company.

Cemex said it had secured a $9 billion acquisition facility through its Spanish unit, a $1.2 billion acquisition facility in Mexico, and a $1.5 billion bridge facility through a Netherlands subsidiary.

The company also said it could draw down at least $1.1 billion from existing revolving loans and a letter of credit facility.

Cemex could pay up to $14.80 (A$19.75) a share, or a premium of about 14 percent to its current offer, if it were to use all of its existing funding arrangements, Credit Suisse said in a research note from Australia.

Cemex offered $13 (A$17) a share when it announced its unsolicited bid on Friday.

"We believe Cemex could pay up to $15 a share (about A$19.50) and still create value," which is premised on $130 million in savings Cemex has targeted, Credit Suisse said.

However, Cemex's targeted savings are conservative, the firm said. "Applying a more likely $230 million would imply an ability to pay up towards $16.10 a share (about A$21 a share)."

Analysts in Australia have said Cemex's offer was too low and that it would have to increase its bid to between A$19 and A$21 to clinch a deal.

Rinker shares in Australia closed on Wednesday at A$18.67, and the company's American Depositary Receipts were up 5 cents at $71.41 in afternoon New York Stock Exchange trade.

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You actualy have to care now...the short and the long of it are gone!

pacer said:

You actualy have to care now...the short and the long of it are gone!

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pacer, what do mean?

Sorry...I mean, I have (as Maxwell Smart used to say) "missed it by that much"....and by "care" I mean that it was a golden opportunity I missed....now I have to get over it and move on to the next good play...ie never look back/ponder on these misses for too long...always look forward for the next one or the game isn't being played properly, and it'll drive me nuts!

That's the best I can do ATM.....all the clues were there.

pacer said:

Sorry...I mean, I have (as Maxwell Smart used to say) "missed it by that much"....and by "care" I mean that it was a golden opportunity I missed....now I have to get over it and move on to the next good play...ie never look back/ponder on these misses for too long...always look forward for the next one or the game isn't being played properly, and it'll drive me nuts!

That's the best I can do ATM.....all the clues were there.

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I wouldn't necessarily say that it's game over for RIN just yet. True, the golden opportunity may have been missed by many here, but seeing as a higher bid is widely anticipated, there's possibly more left in the RIN sp.

hey this stock was basic buffetology.
Good company, but hit down by bad market.
Does anyone know any stocks like this lurking around?

There arn't too many undervalued stocks popping up at the moment. I hold Reb, ARP and Fun and with the except of Fun are fairly to full valued at the moment. I also owned Rin and CDO this year based on bad news. There are some stocks out there at the moment where bad news is hitting the Sp fairly well but I am not sure whether it is an example of a cyclic downturn or actually a case of bad business. A good example of this is AWB. Anyway I would also be interested to see if anyone knew of any undervalued stocks at the moment.

imaginator said:

hey this stock was basic buffetology.
Good company, but hit down by bad market.
Does anyone know any stocks like this lurking around?

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Perhaps you could have a look at MIG, ABS...

Also, I'm going to say BHP as well! Fantastic company that is still considerably cheap and about 12% down on its high before the correction.

Tomorrow should be interesting for RIN... it releases its interim results.