Cimpor rejects CSN’s ‘hostile’ bid
08 January 2010
The board of Portuguese cement manufacturer Cimpor has rejected a takeover offer from Brazilian steel and cement maker CSN. Cimpor said the unsolicited bid undervalues the company.
A statement from Cimpor said, "The offer announced by CSN has not been requested by Cimpor, not previously discussed or even communicated to Cimpor. The Board considers it hostile, opportunistic, irrelevant and disturbing the activity of the Company."
CSN's offer is for € 5,75 per Cimpor share, valuing the company at € 3,84 billion. When the offer was made on December 18, this represented a 5,1% premium on the day's closing price of € 5,47. However, since the offer was made Cimpor shares have traded as high as € 6,55 and the lowest they have been is € 6,35 billion.
A share price of € 6,55 values Cimpor at € 4,37 billion, more than € 500 million above CSN's initial offer. In order to entice Cimpor shareholders to sell, the company is likely to have to offer a premium on top this price.