Bloomberg News

Usiminas Falls as Techint Deal Won’t Be Extended to All Holders

November 29, 2011

Nov. 29 (Bloomberg) -- Voting shares of Usinas Siderurgicas de Minas Gerais SA, Brazil’s second-biggest steelmaker, headed to their biggest drop in eight weeks on speculation minority shareholders may not benefit from the sale of a stake to Techint Group.

Usiminas, as Usinas Siderurgicas is known, slumped 6 percent to 17.86 reais at 5:23 p.m. Sao Paulo time. Preferred shares of the steelmaker declined 6.2 percent to 10.22 reais.

Techint, through its Ternium SA and Tenaris SA units, agreed to buy 139.7 million voting shares in Usiminas at 36 reais each from Camargo Correa SA, Grupo Votorantim and Usiminas’s workers pension fund, according to a statement from Ternium on Nov. 27. Camargo Correa, Votorantim, the pension fund and Nippon Steel Corp. own a combined 63.9 percent voting stake in the company, according to a statement on Usiminas’ website.

Under Brazilian securities regulations, holders of voting shares would receive at least 80 percent of the price paid to controlling shareholders if the company is bought.

Usiminas Chief Executive Officer Wilson Brumer said yesterday in a conference call this rule doesn’t apply to the deal with Techint because the transaction doesn’t constitute a sale as the controlling block “is still the same.”

“Since speculation about a possible takeover has been going for a while, many people were buying voting shares because they were expecting to benefit from tag-along rights,” Daniella Maia Gomes, an analyst in Rio de Janeiro at Ativa Corretora brokerage, said in a phone interview. “This issue is still unresolved, as minority shareholders may challenge Usiminas’ decision.”

--Editors: Brendan Walsh, Marie-France Han

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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