CEMEX, S.A.B. de C.V. (NYSE: CX) announced today that it had
reached and signed an agreement with Rinker Group Limited ("Rinker")
(ASX: RIN, NYSE ADR: RIN) under which it would raise its offer price
to US$15.85 per share in cash, and that the Rinker Board of Directors
had unanimously agreed to recommend to its shareholders that they
accept the offer at this price, in the absence of a superior proposal.
CEMEX's offer now represents a 45% premium to Rinker's last traded
share price during normal trading on ASX on October 27, 2006(1), and a
22% increase from CEMEX's original offer of US$13.00. CEMEX has agreed
to make no adjustment to the offer price for the dividend paid by
Rinker in December of 2006.
The total enterprise value of the transaction, including Rinker's
debt, is approximately US$15.3 billion, equivalent to A$18.7
billion(1). The offer is CEMEX's best and final offer, in the absence
of a superior proposal.
The combination of CEMEX and Rinker will create one of the world's
largest and most profitable building materials companies with pro
forma revenues of US$23.2 billion and more than 67,000 employees in
more than 50 countries.
Lorenzo H. Zambrano, Chairman of the Board and CEO of CEMEX, said,
"This is a good transaction for the stakeholders of both companies.
The combination of CEMEX and Rinker will create value for shareholders
as well as customers, particularly in key growth regions of the United
States, through the complementary nature of our operations and best
practice sharing between our organizations. It offers an attractive
premium to Rinker's shareholders while creating compelling value for
CEMEX shareholders. Importantly, the transaction meets our investment
criteria and we remain committed towards achieving our return on
capital employed target."
Mr. Zambrano continued, "We intend to regain our financial
flexibility as soon as possible and we expect to return to our steady
state capital structure within two years."
The transaction has been unanimously approved by both companies'
Boards of Directors. The Rinker directors have also agreed to accept
the Revised Offer in respect of their own holdings. The offer will be
extended to 7:00 P.M. on May 18, 2007 and is subject only to the
acquisition of 90% of Rinker shares. All other conditions have been
waived, and all necessary approvals, including Australian and U.S.
regulatory approvals, have been obtained.
Under the agreement signed with Rinker, subject to obtaining
necessary Australian regulatory approvals, CEMEX has agreed to offer
existing shareholders the option to accept a fixed amount of A$19.50
per share for the first 2,000 ordinary shares they hold.
Rinker has undertaken not to solicit or engage in discussions with
other parties regarding any competing proposal, subject to the Rinker
directors complying with their fiduciary duties, and has given certain
other undertakings in relation to the conduct of its business. A
summary of the key terms of the agreement is set out in the
attachment.
A Supplementary Bidder's Statement reflecting the full extent of
the agreement with Rinker, and the resulting Revised Offer, will be
filed in the coming days.
CEMEX is a growing global building solutions company that provides
high quality products and reliable service to customers and
communities in more than 50 countries throughout the world. CEMEX has
a rich history of improving the well-being of those it serves through
its efforts to pursue innovative industry solutions and efficiency
advancements and to promote a sustainable future. For more
information, visit www.cemex.com.
###
A Supplementary Bidder's Statement will shortly be lodged with the
Australian Securities and Investments Commission, the Australian Stock
Exchange, the Mexican Stock Exchange and Mexican Stock Market
Authorities. When the Supplementary Bidder's Statement is sent to
Rinker's shareholders, it will be filed with the United States
Securities and Exchange Commission (the "Commission").
Investors and security holders are urged to read the Supplementary
Bidder's Statement from CEMEX Australia Pty Ltd ("Bidder") regarding
the proposed Offer described above, when it becomes available, as it
will contain important information. Once filed in the United States
with the Commission, the Supplementary Bidder's Statement will be
available on the Commission's web site. Investors and security holders
may obtain a free copy of the Supplementary Bidder's Statement (when
it is available) and other documents filed by CEMEX with the
Commission on the Commission's web site at www.sec.gov. The
Supplementary Bidder's Statement and these other documents may also be
obtained for free from Bidder, when they become available, by
directing a request to the CEMEX Offer Information Line on 1300 721
344 (within Australia) or 1 (866) 244 -1296 (toll free within the
United States).
This document includes "forward-looking statements." These
statements contain the words "anticipate", "believe", "intend",
"estimate", "expect" and words of similar meaning. All statements
other than statements of historical facts included in this document,
including, without limitation, those regarding CEMEX's financial
position, business strategy, plans and objectives of management for
future operations (including development plans and objectives relating
to CEMEX's products and services) are forward-looking statements. Such
forward-looking statements involve known and unknown risks,
uncertainties and other important factors that could cause the actual
results, performance or achievements of CEMEX to be materially
different from future results, performance or achievements expressed
or implied by such forward-looking statements. Such forward-looking
statements are based on numerous assumptions regarding CEMEX's
operations and present and future business strategies and the
environment in which CEMEX will operate in the future. These
forward-looking statements speak only as of the date of this document.
Accordingly, there can be no assurance that such statements, estimates
or projections will be realized. None of the projections or
assumptions in this document should be taken as forecasts or promises
nor should they be taken as implying any indication, assurance or
guarantee that the assumptions on which such projections have been
prepared are correct or exhaustive or, in the case of assumptions,
fully stated in this press release. CEMEX expressly disclaims any
obligation or undertaking to disseminate any updates or revisions to
any forward-looking information contained herein to reflect any change
in CEMEX's results or expectations with regard thereto or any change
in events, conditions or circumstances on which any such statement is
based, except as required by law. The projections and forecasts
included in the forward-looking statements herein were not prepared in
accordance with published guidelines of the American Institute of
Certified Public Accountants, the Commission or any similar body or
guidelines regarding projections and forecasts, nor have such
projections or forecasts been audited, examined or otherwise reviewed
by the independent auditors of the Company. You should not place undue
reliance on these forward-looking statements.
Summary of Bid Agreement
BidCo (Bidder) and CEMEX (CEMEX) have entered into a Bid Agreement
with Rinker (Rinker) dated April 9, 2007.
VARIATION OF TAKEOVER OFFER
Under the Agreement, Bidder has agreed to vary the terms of its
off market bid for all of Rinker's ordinary shares dated 14 November
2006 (the Offer). The variation will:
-- increase the consideration payable to Rinker shareholders to
US$15.85 for each ordinary share in Rinker (the Higher Price);
-- permit Rinker shareholders who accept the Offer to retain the
whole of the interim dividend of A$0.16 per ordinary share
(which had a record date of 24 November 2006) previously paid
by Rinker to its shareholders, without any reduction to the
Higher Price payable to those who accept the Offer; and
-- free the Offer from all defeating conditions other than the
90% minimum acceptance condition.
Bidder will today lodge with the Australian Securities and
Investments Commission and Rinker the required notice under section
650D of the Corporations Act and lodge with the Australian Stock
Exchange Limited the required notice under section 650F of the
Corporations Act as soon as is practicable. The notice under section
650D must be sent to Rinker shareholders no later than the time at
which the supplementary bidder's statement is sent to Rinker
shareholders, which is 5 business days after the announcement of the
variation to the Offer.
In addition, subject to obtaining any necessary ASIC modifications
to the Australian Corporations Act and Takeovers Panel approval (if
required), Bidder will vary the terms of the Offer so that Rinker
Shareholders who had acquired shares as at close of business on April
5 2007 and are subsequently registered as holders by close of business
on April 12 2007 and who accept the Offer are given the option (in
addition to the existing options available under the Offer) to accept
A$19.50 for the first 2,000 ordinary shares in the Target held by that
Target Shareholder.
The Bidder must promptly apply to ASIC for the modifications
required to facilitate the variations referred to above. As soon as
practicable after the receipt of the required modifications from ASIC,
the Bidder must take all actions necessary to validly vary the terms
of the Takeover Offer in the manner contemplated above and make a
public announcement of such variation.
RECOMMENDATION BY RINKER'S DIRECTORS
Under the Agreement, immediately following the announcement by
Bidder of the increase in offer price and waiver of bid conditions,
Rinker's directors must announce the Rinker board's unanimous
intention to recommend the Offer at the Higher Price, in the absence
of a superior proposal. In addition, a statement will be made that
each Rinker director intends to accept the Offer at the Higher Price,
in the absence of a superior proposal.
EXCLUSIVITY
Under the Agreement, Rinker has agreed, for a period commencing on
the signing date and ending on the date that the Offer closes or
lapses (the Restriction Period), that:
(a) it must ensure that neither it nor any of its officers,
employees and advisors, directly or indirectly solicits, initiates or
invites any enquiries, discussions or proposals with respect to, or to
undertake due diligence in connection with, a competing proposal for
Rinker (the No Solicitation Restriction); and
(b) it must ensure that neither it nor any of its officers,
employees and advisors, negotiates or enters into, continues or
participates in any discussions or negotiations with any third party
with respect to a competing proposal, even if: that person's competing
proposal was not directly or indirectly solicited, initiated, or
encouraged by Rinker or any of its officers, employees and advisors;
or that person has publicly announced their competing proposal, and it
must immediately terminate any such discussions or negotiations that
are underway at the date of the Agreement (the No Talk Restriction);
The obligations in paragraph (b) do not apply to the extent that
they restrict Rinker or the Rinker board from taking or refusing to
take any action provided that the Rinker directors have determined, in
good faith after having consulted with their external legal and
financial advisers, that failing to take, or failing to refuse to
take, such action would or would be likely to constitute a breach of
the Rinker directors' fiduciary or statutory obligations.
NOTIFICATION OF OTHER APPROACHES
Under the Agreement, Rinker has agreed that during the Restriction
Period if a competing proposal is announced or is received by Rinker
which the Rinker directors consider is superior to the Offer and the
Rinker directors intend to change or withdraw their recommendation in
respect of the Takeover Offer, Rinker must notify the Bidder of the
material terms of, but not the identity of the party making, the
competing proposal (if it has not been publicly announced).
CONDUCT OF BUSINESS AND OTHER OBLIGATIONS
Under the Agreement, during the Restriction Period, Rinker will
not, and will procure that the Rinker Group will not:
(a) convert any or all or all of its shares into a larger or
smaller number of shares or resolve to reduce its share capital in any
way; or
(b) issue or agree to issue shares or convertible notes or grant
or agree to grant an option over its shares.
During the shorter of the Restriction Period and the period
commencing on the date of the Agreement and ending 3 months later,
Rinker:
(a) will conduct, and will procure that the Rinker Group conducts,
the business of the Rinker Group in the usual and ordinary course of
business;
(b) will not, and will procure that the Rinker Group does not,
charge or agree to charge, the whole or a substantial part, of its
business or property; and
(c) will not, and will procure that the Rinker Group does not,
make any material acquisitions or disposals or undertake any new
commitments which would have breached the condition set out in clause
8.6(h) of the Bidder's Statement dated 30 October 2006 had it not been
waived by the Bidder,
In addition, during the Restriction Period, Rinker must not pay a
dividend, other than annual and half yearly dividends consistent with
past practice, (provided that this does not prejudice the Bidder's
rights under clause 8.8(e) of the Bidder's Statement to adjust the
revised offer price in respect of any such dividend) or undertake a
buy-back, capital return or other payment to shareholders without the
consent of the Bidder and without prejudice to the Bidder's rights
under clause 8.8(e) to make adjustments to the revised offer price, as
appropriate.
(1) Based on converting the Revised Offer into Australian dollars
at an exchange rate of A$1.00 to US$0.8167 which represents the latest
Reserve Bank Mid Point Rate available, dated 5 April 2007