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CSN seeks to force Ternium into offer for Usiminas shares

Keywords: Tags  CSN, Cia. Siderurgica Nacional, Usiminas, Usinas Siderirgicas de Minas Gerais, Ternium, Tenaris, steel, steelmaking lawsuit

SÃO PAULO — Brazil’s Cia. Siderúrgica Nacional (CSN) has filed a lawsuit that would force a trio of its competitors to pay as much as $2.64 billion to buy up minority shareholdings in steelmaker Usinas Siderurgicas de Minas Gerais SA (Usiminas).

CSN’s lawsuit was filed against Ternium SA and its Argentinian steelmaking subsidiary Ternium Siderar, along with Confab Industrial SA, the Brazilian subsidiary of Luxembourg-registered pipe maker Tenaris SA.

The lawsuit asks them to launch a tender offer to all minority holders of ordinary shares in Brazilian flat steel producer Usiminas. CSN is one of those minority shareholders. Ternium, Ternium Siderar and Confab acquired a combined 27.66-percent stake in Usiminas in January last year.

CSN’s lawsuit alleges that, under applicable Brazilian laws and rules, the three acquirers "were required to launch a tag-along tender offer to all minority holders of Usiminas’ ordinary shares for a price per share equal to 80 percent of the price per share paid in such acquisition, or 28.8 reais," Tenaris and Ternium said.

In a Feb. 5 filing with the Buenos Aires stock exchange, Ternium Siderar said that Ternium and Siderar would have shares of 60.6 percent and 21.5 percent, respectively, in the offer.

An offer for 182.6 million shares would cost Ternium, Ternium Siderar and Confab at least 5.26 billion reais ($2.64 billion), because the lawsuit cites the 28.8 reais price "plus interest," according to the calculations of AMM sister publication Steel First.

This sum would be more than the 5.03 billion reais they paid to acquire the 27.66-percent stake in Usiminas last year.

Both Ternium and Tenaris said they will defend their position "vigorously." CSN didn’t immediately comment.

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