Brazilian conglomerate Camargo Correa has rejected Cimpor management's counter-proposal for a merger with Camargo's cement unit, saying it was "unrealistic,” Reuters reports.
Cimpor's board, which had earlier said the price of EUR5.5/share offered by Camargo was too low, said on Saturday a merger would widen Cimpor's portfolio and create better synergies, preventing the withdrawal of another Brazilian shareholder, Votorantim. Its proposal involves paying up to EUR1/share in dividends to Cimpor shareholders.
However, Camargo's unit Intercement responded on Sunday that the proposal was "untimely, unrealistic and inappropriate as it does not address various interests at play at Cimpor that have already been publicly expressed.
Two key Cimpor shareholders, including state-controlled bank CGD, have already said they are prepared to sell their stakes under Camargo's terms and most analysts expect the bid to succeed. Camargo is already the largest single Cimpor shareholder and the two stakes would give it control.
The Portuguese government has said a Cimpor deal has to help CGD to deleverage and defended Camargo's bid from suggestions it was against the national interests.