In issue 209/Sep 06 (Avoid—$12.75) we stated that even though Rinker’s share price had declined 41% from its peak, we weren’t willing to bet that it had bottomed—and we even called the stock a ‘time bomb’. Well, we were wrong. Mexican building materials company Cemex has launched a takeover bid of $US13 a share, or roughly $17 in Aussie terms. In response to the bid, Rinker’s management has come out with the stock-standard line that the offer is inadequate. But with a weak outlook for US-based building materials companies for the next few years, it doesn’t seem outrageously low to us. The market, though, is already expecting a higher bid from Cemex or perhaps another company, with the stock trading well above the bid price. It looks like we underestimated the ‘urge to merge’ of international building materials companies and, as is usual with takeovers, we suggest anyone who owns the stock should continue to HOLD.