Bloomberg News

Usiminas Gains Most in 2 Months as Ternium Said to Buy Stake

November 18, 2011

(Adds statement from Ternium in fourth paragraph.)

Nov. 17 (Bloomberg) -- Usinas Siderurgicas de Minas Gerais SA, Brazil’s second-biggest steelmaker, gained the most in two months after Ternium SA said it’s in talks to buy a stake.

Voting shares of Usiminas, as the company is known, jumped as much as 7.3 percent in Sao Paulo trading, the most intraday since Sept. 9. The stock rose 2 percent to 23.72 reais at 2:24 p.m. local time. American depositary receipts of Ternium fell 11 percent to $22.50 in New York.

Ternium offered to pay 40 reais a share to buy a 26 percent voting stake in Usiminas from Camargo Correa SA and Grupo Votorantim, Exame magazine reported on its website yesterday, citing an unidentified executive involved in the talks.

Ternium confirmed it’s in talks with Usiminas’s controlling group to buy a stake, according to a statement today. The company said it hasn’t made any final decision on the potential transaction.

“Speculation about a possible takeover has been around for a while, and maybe the controlling shareholders will decide that now is a good time to sell,” Victor Penna, an analyst at Banco do Brasil SA, said in a telephone interview from Sao Paulo.

A press official at Usiminas said the company wouldn’t comment on market rumors.

Cia. Siderurgica Nacional SA, Brazil’s third-biggest steelmaker, has been buying Usiminas stock in the market since at least January, when it said it may boost holdings to a level that may alter management or the control structure.

Nippon Steel Corp., Japan’s largest steelmaker, could exercise its right of first refusal and buy out its partners Camargo Correa and Votorantim to thwart the takeover offer from CSN, two people familiar with the negotiations said in September. Nippon Steel would then resell to Gerdau SA, Latin America’s largest steelmaker, part of the stake in Usiminas, they said.

--Editors: Marie-France Han, Glenn J. Kalinoski

To contact the reporter on this story: Ney Hayashi in Sao Paulo at ncruz4@bloomberg.net

To contact the editor responsible for this story: David Papadopoulos in New York at papadopoulos@bloomberg.net


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