Usinas Siderurgicas de Minas Gerais SA rose to a six-month high after Credit Suisse Group AG said Cia. Vale do Rio Doce’s sale of its stake in the steel company at an above-market price signaled the stock is undervalued.
Usiminas, as Brazil’s second-biggest steelmaker is known, gained 4.2 percent to 34.71 reais in Sao Paulo trading, the highest intraday level since Oct. 3.
Vale said yesterday that it sold its stake in Usiminas to controlling shareholders Camargo Correa SA, Mitsubishi Corp. (8058), Nippon Steel Group and Grupo Votorantim. The voting shares were sold for 40 reais each, 33 percent more than yesterday’s closing price of 30.12 reais, the company said in an e-mailed statement.
“This is a strong signal sent out by Usiminas’s controlling shareholders that the company’s current share price is undervalued by the market,” Credit Suisse analyst Roger Downey wrote in a note to clients.
Usiminas shares will likely outperform its industry rivals, Sao Paulo-based Downey wrote.
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