Reuters: Regulatory News: Camargo rejects "unrealistic" Cimpor merger proposal

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Camargo rejects "unrealistic" Cimpor merger proposal May 14th 2012, 09:20 LISBON | Mon May 14, 2012 5:20am EDT LISBON May 14 (Reuters) - Brazilian construction group Camargo Correa, which is trying to take over Portugal's top cement maker Cimpor, has rejected Cimpor management's counter-proposal for a merger with Camargo's cement unit, saying it was "unrealistic." Cimpor's board, which had earlier said the price of 5.5 euros ($7.12) a share offered by Camargo was too low, said on Saturday a merger would widen Cimpor's portfolio and create better synergies, preventing the withdrawal of another Brazilian shareholder, Votorantim. Its proposal involves paying up to 1 euro a share in dividends to Cimpor shareholders. But Camargo's unit Intercement responded on Sunday that the proposal was "untimely, unrealistic and inappropriate as it does not address various interests at play at Cimpor that have already been publicly expressed." Two key Cimpor shareholders, including state-controlled bank CGD, have already said they are prepared to sell their stakes under Camargo's terms and most analysts expect the bid to succeed. Camargo is already the largest single Cimpor shareholder and the two stakes would give it control. The Portuguese government has said a Cimpor deal has to help CGD to deleverage and defended Camargo's bid from suggestions it was against the national interests. Along with other Portuguese banks, CGD is under pressure to improve its capital position under the terms of a 78 billion euro EU/IMF bailout for Portugal. Earlier, Portuguese conglomerate Semapa proposed that some Cimpor shareholders should form a joint holding company to try to keep the company in Portuguese hands, but the government said such a move would not help deleverage CGD. Cimpor shares were flat in early trading on Monday at 5.49 euros, while the broader market in Lisbon was off 1.3 percent. Link this Share this Digg this Email Reprints

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