Fletcher Building shares rocket after Rinker bid

Fletcher Building shares shot up 36c yesterday to $9.60 after a bid for Australian building products company Rinker on Friday put a spotlight on the building materials sector.

Cemex SA, the world's third-largest cement maker, is bidding US$13 ($19.65) a share for Rinker, which was spun out of CSR in 2003.

Arthur Lim, investment director at Macquarie Equities, said any takeover activity tended to increase valuations in the same sector.

Fletcher Building has long been seen as a potential takeover target and the Rinker bid was a reminder of the possibility. Lim said Fletcher Building should not be benchmarked against Rinker because they had different growth profiles and operated in different markets but if it was, a valuation of up to $13 a share was possible for Fletcher Building.

- NZPA