RIN - Rinker Group

Lert said:

Is anyone prepared to take a guess at what the AUD/USD exchange rate will be at settlement ? The break even point (US$15.85 vs AU$19.50) is at an exchange rate of 0.813. If the exchange rate is greater than this its better to take the $19.50 (option 2), if less option 1 seems to be the way to go..

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Hi, At the moment I have my form ready to post. Will watch the exchange rate as the greenback looks set for a recovery.

Cemex have moved on again to a holding of 30.21% of Rinker Group, according to todays ASX announcement.

Cemex continue to make strong headway towards their 50.1% target in announcing they hold 35.62% of Rinker this morning.

Cemex appear to be struggling to reach the 50.1% level for acceptances for their bid. That is surprising, but on the other hand this long struggle has given many shareholders a certain amount of resilience to these not quite good enough bids.

Cemex have once again extended their 8 month bid for Rinker Group to June 22nd 07.

Cemex have raised their holding in Rinker Group to 37.79%. A sign that acceptors are slowing in the last 5 days.

Hold on to your RIN

Cemex know that if they get up, they are getting it cheap.

Sorry less than a hundred words well lets see , I suppose Shakespeare would have had to look at the word count on his sonnets for his benefactor the Duke of somewhere and James Joyce's stream of consciousness would not have been a stream if it didn't wend its way here and there just like rinker's bid which is low now that the housing market in the US will be protected as we get ready for another election cycle next year.

and cemex will get it cheap at this price.

Garpal

Garpal Gumnut said:

Hold on to your RIN

Cemex know that if they get up, they are getting it cheap.

Sorry less than a hundred words well lets see , I suppose Shakespeare would have had to look at the word count on his sonnets for his benefactor the Duke of somewhere and James Joyce's stream of consciousness would not have been a stream if it didn't wend its way here and there just like rinker's bid which is low now that the housing market in the US will be protected as we get ready for another election cycle next year.

and cemex will get it cheap at this price.

Garpal

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I get the feeling that Cemex will manage to grab 50.1% of Rinker Group and it will be interesting to see if they get that much more.

Todays announcement shows they have 39.42%.

Cemex continue to make very gradual inroads on their 50.1% target having achieved 41.27% of Rinker today.

Getting closer and closer to the 50.1% line are Cemex having raised their holding in Rinker to 43.15%.

Tantalisingly close, as Cemex almost reach their target holding of 50.1% in RIN., and issue an ASX notice of 47.13%.

49.51%, as Cemex home in on their target, Rinker Group. Looks all a formality now and 50.1% just a knats away.

they got it. will rinker be around for much longer??
http://www.bloomberg.com/apps/news?pid=20601087&sid=asW0dmmz6nH0&refer=home

Cemex said it plans to take over the management of Rinker during the week that begins on June 18 and has requested current board members step down in favor of Cemex appointees.
-Bloomberg-

Looks like the end now for Aussie Rinker Group as Cemex notch up 52.65%. Final date for acceptance is 22nd June 2007.

OK Guys, can you help me? Am I missing something here?
I want to take my mates out to lunch next week and thinking of how to pay the bill.

I had some RIN shares and have already accepted the Chemex $19.50 offer. So that's OK. But..............

The offer now closes on 22 June. RIN traded today to $18.77, so lets assume they open about the same next week. I buy 4 lots (one of my trading accounts, my wife's and 2 children) of 2000 RIN, to a total of 8000. I then accept their offer (for the 4 lots of 2000 shares) at $19.50. That makes a profit of $5,840, less brokerage and some tax (no one goes broke for paying tax). Plus of course the dividend, which Chemex say they will pay. That should leave me sufficient for a reasonable lunch and a few bottles of wine. Sounds like money for old rope to me, or is it too good to be true?

One problem is - how do I tender the shares to Chemex? And are they obliged to pay $19.50 (my reading of the offer says they are???). I would have about $150K out for about 3 weeks (payment in early July, I believe).

Does this make sense, or can I get screwed somewhere in all this?

bobbydazzler said:

Cemex said it plans to take over the management of Rinker during the week that begins on June 18 and has requested current board members step down in favor of Cemex appointees.
-Bloomberg-

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Good on them. They recommended the buyout and now they're gonna lose their jobs. I hope they are proud of it.

Buddy said:

OK Guys, can you help me? Am I missing something here?
I want to take my mates out to lunch next week and thinking of how to pay the bill.

I had some RIN shares and have already accepted the Chemex $19.50 offer. So that's OK. But..............

The offer now closes on 22 June. RIN traded today to $18.77, so lets assume they open about the same next week. I buy 4 lots (one of my trading accounts, my wife's and 2 children) of 2000 RIN, to a total of 8000. I then accept their offer (for the 4 lots of 2000 shares) at $19.50. That makes a profit of $5,840, less brokerage and some tax (no one goes broke for paying tax). Plus of course the dividend, which Chemex say they will pay. That should leave me sufficient for a reasonable lunch and a few bottles of wine. Sounds like money for old rope to me, or is it too good to be true?

One problem is - how do I tender the shares to Chemex? And are they obliged to pay $19.50 (my reading of the offer says they are???). I would have about $150K out for about 3 weeks (payment in early July, I believe).

Does this make sense, or can I get screwed somewhere in all this?

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Hi buddy, Time was up for buying to get A$19.50 a while back. You will only get US$15.85 if you buy now and the exchange rate is terrible, equates to about A$18.80.
Cemex have been reported as buying stock on any dip below the offer price.

Interesting to see that Cemex continue to struggle as they scramble to a holding of just 53.44% in Rinker, this morning.

So what's the deal with this arb of buying the shares on the market and accepting the $19.50 offer? What are the risks?

From The Australian:
Cemex deal a chance for cash
COMMENT
Matthew Stevens
09jun07

WOULD you like to make a guaranteed $1288 in just 30 days for an investment of $37,700?

That represents an annualised return of 41 per cent and no, I am not some dangerous, cash-short property trust spruiker.

But I can tell you, that is exactly why 5372 retail investors yesterday spent $37,700 each to buy parcels of 2000 shares in takeover victim Rinker Corp.

To put that in context, that represents a trade every 4 or so seconds on a day when the retail market suddenly started behaving like hedge funds. They came, they saw, they arbitraged.

How does this work? Well, let's wind back a bit here. The Mexican construction supplies king Cemex has offered $16.6 billion for Rinker in what is the biggest all-cash, but least headline-grabbing, takeover in Australian corporate history.

One of the enduring problems with the bid was that, because Rinker's business is largely US-based, Cemex insisted it would pay only US dollars for its target.

But, after two or three goes at getting its offer right, the Mexicans came up with an alternative to protect small retail shareholders from the currency exposure implied in its offer. Cemex decided that for the first 2000 shares of any acceptances it would pay $19.50 a pop.

Which means what? From the moment the offer went unconditional on Thursday evening (given that Cemex crossed the 50 per cent acceptance hurdle), retail investors have the chance to get $19.50 for 2000 shares in Rinker.

But the Cemex offer of $US15.85 is what will be paid on the balance of any acceptances, which is about $18.80 at the current exchange rate. Which is why the on-market price of Rinker is going to remain at the $18.77 it closed at last night.

So, if on Tuesday you want to go out and buy 2000 Rinker shares at $18.77 or so, you will do so knowing that you can sell them into the offer at $19.50. Which is money for old tacos as far as I am concerned.

Oh, and yes, that is pre-capital gains tax, but remember Cemex doesn't settle for 30 days after the offer closes which is, at the moment, on June 24. And that means settlement happens in the new financial year which means any tax problems are delayed until 2008.

The other thing to remember here is that, given Cemex hits its closure dates, you have only seven days to get in and then accept because the $19.50 option ends three days before the 24 June deadline.

Which means, once you deduct say $100 for brokerage (and weren't they having a lovely time yesterday) and discount your return by say 7 per cent for the cost of money over 30 days, you end up with your guaranteed pre-tax gain of $1288.

And the best thing is, no one gets hurt. The retail investor is very happy as are institutions who want to sell the shares now at the offer price rather than wait that extra 30 days at least. Meanwhile, the brokers have the prospect of maybe 40 per cent of Rinker being chopped up and sold in tiny parcels at $100 a trade.

And Cemex, well, it will end up paying $100 million more for Rinker. But once your total bill crossed the $16 billion threshold, what's $100 million between friends?