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Camargo Correa’s Bid for Cimpor Seems Correct, Borges Says

Camargo Correa SA’s 2.48 billion-euro ($3.3 billion) bid to buy out Cimpor-Cimentos de Portugal SGPS SA seems appropriate and a rival offer for the cement company is unlikely, a consultant for the Portuguese government said.

“The price seemed correct to us,” said Antonio Borges, who is helping monitor the sale of state-owned assets. He spoke at a parliamentary hearing in Lisbon today. “It is a price that will allow Caixa Geral de Depositos to make a profit.”

A better rival offer is unlikely to take place as more than 50 percent of Cimpor’s shares are already held by two Brazilian companies, he said.

Camargo Correa, Brazil’s No. 2 construction company, on March 30 offered 5.50 euros a share to buy the remaining 67 percent of Cimpor it doesn’t already own. Votorantim Participacoes SA, which competes with Camargo in Brazil’s cement market, owns a 21 percent stake of Cimpor while Portuguese state-owned bank Caixa Geral de Depositos has a 9.6 percent stake.

Borges said he expected Votorantim to sell its stake in Cimpor, adding he was unaware of any deal between Camargo and Votorantim about Cimpor.

“The expectation is for Votorantim to get out of Cimpor and surely they will take some assets although that is a matter that only concerns them,” said Borges.

No Other Buyer

Camargo’s offer was 10 percent higher than Cimpor’s last price before the bid announcement and Borges said Cimpor’s fair market value at the time was about 5 euros a share.

“If the price is low why hasn’t another buyer appeared?” said Borges. “Portugal has very little capital and the ability to keep control of Portugal’s best companies demands shareholders to be well capitalized, otherwise when a foreign offer takes place they will sell.”

Semapa-Sociedade de Investimento e Gestao SGPS SA’s proposal to Caixa Geral and Banco Comercial Portugues SA’s pension fund to create a venture that would control their stakes in Cimpor can’t be considered as an alternative offer, said Borges.

“It isn’t an offer to buy the company,” said Borges, a former head of the International Monetary Fund’s European department.

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