Race for CIMPOR: Camargo given 10 days to submit counterbid

The Portuguese Securities Market Commission (CMVM) has notified Camargo Corrêa SA (Camargo), one of the largest business conglomerates of Brazil and a prospective bidder for the Portuguese cement maker Cimentos de Portugal, SGPS SA (CIMPOR) to submit its counterbid as per rules in 10 days or withdraw its merger proposal.

Barely a month ago, one of the largest steel producers in Brazil, Companhia Siderurgica Nacional (CSN) launched an unsolicited offer for the takeover of CIMPOR for €5.75 per CIMPOR share with a total value of approximately €3.86 billion ($5.5 billion). CSN's offer was conditional on obtaining 50 per cent plus one share in the cement maker's 672 million outstanding shares. (See: Brazil's CSN bids $5.5 billion for Portugal cement maker CIMPOR)

According to CMVM regulations, a counterbid has to be at least for the same stake, and at a price of at least 2 per cent higher than the initial bid.

Lisbon-based CIMPOR is the largest Portuguese group producing cement, hydraulic lime, aggregates and concrete products. The company's total installed cement capacity is over 31 million tonnes per annum spread over 13 countries, and the turnover is around $3 billion.

CIMPOR's major shareholders include Portuguese construction major Teixeira Duarte (22.9 per cent), French cement giant Lafarge (17.3 per cent), Portuguese billionaire Manuel Fino (10.9 per cent), Banco Comercial Portugues (BCP) Pension Fund (10 per cent) and others.

Sao Paulo-based Camargo Corrêa's operations cover diversified businesses such as engineering and construction, cement, footwear, textiles, steel and real estate, with an annual turnover of over $7 billion.