Votorantim now has 21.2% stake in Cimpor

Votorantim Cimentos, Brazil’s largest cement producer, paid 154.45 million euros ($211 million) for an additional 3.93 percent stake in Portuguese rival Cimpor (CPR.LS), which is the target of stake purchases by two other Brazilian companies.
The deal gives Votorantim, part of Brazil’s most diversified industrial conglomerate, a total stake of 21.2 percent in the Portuguese firm, according to a statement released by the Brazilian company.

The stake was purchased from Portugal-based Cinveste at a price of 5.85 euros a share, the statement said. The price could be revised upward, depending on events such as a tender offer for Cimpor shares by a third party, Cinveste said in a separate statement filed with Portuguese regulators.

Interest by Votorantim and rival cement company Camargo Correa to buy minority stakes in Cimpor emerged after Brazilian steelmaker CSN (CSNA3.SA)(SID.N) on Dec. 18 offered $5.5 billion to buy full control of the Portuguese company. CSN launched its cement unit in May last year and hoped control of Cimpor would help it overtake Camargo as Brazil’s second largest cement producer.

CSN has dubbed the moves by Votorantim and Camargo Correa as anti-competitive and filed an antitrust suit in Brazil on Feb. 10. Any change in the shareholding structure of Cimpor should be shunned by regulators, CSN alleged in the suit.
Cimpor is Brazil’s fourth largest cement producer.

Votorantim and Camargo have won the blessing of the Portuguese government to buy non-controlling stakes in Cimpor. Camargo Correa’s stake, purchased in a series of transactions this month, is slightly above 30 percent.
Under an accord signed this month with Portuguese state-owned bank Caixa Geral de Depositos, Sao Paulo-based Votorantim and the bank will have a combined vote in some Cimpor decisions. The bank has a 9.6 percent stake in Cimpor.

DEFENSIVE MOVE

Votorantim’s move comes after CSN, Brazil’s second-largest maker of flat steel, extended through Feb. 22 its offer to buy a third of Cimpor. CSN is offering 6.18 euros a share, a premium of 6.5 percent over Cimpor’s price of 5.80 euros on Wednesday and 7.5 percent more than CSN’s original bid made in December.

Cimpor’s board on Wednesday rejected CSN’s approach for a second time, saying it does not reflect the company’s fair value. The board also recommended that shareholders refrain from selling their shares under the new terms offered by CSN.
But according to a Feb. 16 report by Citigroup, Brazilian antitrust regulators might thwart Votorantim’s and Camargo’s efforts to block CSN.

Cimpor shares fell 1.4 percent in Lisbon on Wednesday. CSN jumped 2.1 percent to 58.99 reais in Sao Paulo, its highest level in more than a month.