Cimpor defence document rejects Camargo Correa bid

Cimpor defence document rejects Camargo Correa bid
Published: 16 April 2012


The Cimpor defence document claims that the Camargo Correa bid significantly undervalues the company. It points out that the EUR5.50 per share offer compares poorly with the EUR6.50 per share paid by Camargo Correa for the shares it acquired from Teixeira Duarte and from Bipadosa in 2010.  Not only that, it is also lower than the failed EUR5.75/share bid for Cimpor by the steel company Companhia Siderurgica National (CSN) just over two years ago, that led to Camargo Correa and Votorantim getting involved.

A higher offer would also be expected if Camargo Correa is looking to buy out Votorantim, the second largest shareholder behind Camargo Correa.  Votorantim currently holds a 21.2% stake in Cimpor, but has an option to increase this to 30.8%. 

If Votorantim does not exercise that option, the shareholder will sell out to Camargo Correa, as will another holder, taking Camargo Correa's interest to 52.5%. Votorantim will probably sell out, but only at a higher price and thus exercise its option to increase its stake, unless Camargo Correa increases its offer.