Matthew Stevens had an interesting column in The Weekend Australian in which he revealed many thousands of small investors were exploiting the two-tiered nature of Cemex’s bid for Rinker to make a quick 4% trading profit.

The surging Australian dollar is increasingly making Cemex’s $US15.85 a share offer less and less attractive. However, the Mexicans have promised investors $A19.50 (equivalent to $US16.46 at the current exchange rate) for the first 2000 Rinker shares.

The situation is legally questionable, as Bryan Frith pointed out in April, but ASIC appears to be turning a blind eye to what is now clearly a more attractive takeover bid for small investors.

The arbitrage opportunity has seen many thousands of investors pile $37,500 into 2000 Rinker shares at the market price of about $18.75, knowing that Cemex will give them back $39,000 early in the new financial year.

A couple of brokers urged their clients to do likewise, but after The Weekend Australian put it on the front of its business section on Saturday, trading has gone ballistic this morning with another 5.6 million Rinker shares changing hands in the first hour of trade.

Rinker has 895 million shares on issue and Cemex now has its hands on 478.3 million of them. However, the record 32 million shares traded last Thursday, along with the 24 million on Friday will mostly finish up with Cemex in many thousands of 2000 share lots.

This morning’s update reveals Cemex now has 53.44 %, but this little rort could well see the Mexicans push close to 90% and compulsory acquisition.

The Weekend AFR has its numbers all wrong, claiming that Thursday’s trading alone would cost Cemex an additional $5 million. Matthew Stevens estimated it would be about $100 million in total, but the real figure has the potential to be much greater than that.

The Cemex offer closes at 7pm on 22 June. If you buy the stock today, it will settle by Thursday and then they have to send you the offer within five business days, which pushes it to 21 June. As long as you sign over the stock by 7pm the next night at a Computershare office, it’s money for jam.

If Cemex really wants 100% of Rinker, they should extend the offer by another month and simply allow more and more Australians to get in on the rort. This would bid the stock up to more than $19, which surely would attract even the recalcitrant institutions who are resisting $US15.85 a share.

After all, who wants to get compulsorily acquired at $18.70 when you can sell on market for more than that?