Bloomberg News

Camargo Set to Win Control of Cimpor After No Rival Emerged

June 20, 2012

Camargo Correa SA, Brazil’s second- biggest construction company, will probably succeed in its bid to take control of Cimpor-Cimentos de Portugal SGPS SA when the results of the 2.48 billion-euro ($3.14 billion) offer for the Portuguese cement maker are made public today.

Bidding through its Austrian subsidiary Intercement, Camargo on March 30 offered 5.50 euros a share to buy the two- thirds of Cimpor it didn’t already own. The bid was 10 percent higher than Cimpor’s closing price before the announcement. By taking control of the Portuguese company, Camargo would increase its market share in Brazil, where Cimpor is the fourth-largest cement producer.

Portugal’s state-owned Caixa Geral de Depositos SA said on March 30 that it planned to sell its 9.6 percent stake to Camargo. A week later, Banco Comercial Portugues SA (BCP)’s pension fund said it also aimed to sell its 10 percent stake to the Brazilian company, raising the likelihood of Camargo owning at least 53 percent of Cimpor.

“The fact that no rival bidder stepped forward means Camargo’s offer is the best and only one, making it very likely that it will win control,” Paulo Monteiro, who is in charge of managing Portuguese equity fund Alves Ribeiro Medias Empresas Portugal (ARMEMPO), said in an interview. “I waited until the last day to sell all of my fund’s shares in Cimpor.”

Cimpor shares dropped 3.4 percent to 5.455 euros at 10:17 a.m. in Lisbon trading, the biggest intraday fall since Dec. 1.

Asset Exchange

The results of Camargo’s bid for Cimpor are scheduled to be announced today at the Euronext Lisbon exchange at 5 p.m. Camargo’s offer period ended yesterday.

As no competing suitor for Cimpor emerged, eight Portuguese equity funds, with about 133 million euros under management, sold most of their Cimpor holdings after the Camargo bid was announced, according to data on these funds published on Portugal’s securities regulator website.

After taking control of Cimpor, Camargo plans to exchange some of the Portuguese company’s assets in China, India, Morocco, Tunisia, Turkey, Peru and Spain for Brazilian rival Votorantim Cimentos SA’s 21 percent stake in Cimpor, it said on May 6.

Portugal’s securities regulator CMVM said on May 29 that Camargo’s offer was compulsory and it considered the voting rights of Camargo and Votorantim to be attributed to both companies, as well as the stake held by Caixa Geral de Depositos. The direct and indirect stake of Camargo and Votorantim in Cimpor was 64.38 percent, according to the regulator.

To contact the reporter on this story: Henrique Almeida in Lisbon at halmeida5@bloomberg.net

To contact the editor responsible for this story: Jerrold Colten at jcolten@bloomberg.net


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