CSN Readies Short Term M&A Funding

CSN’s board has approved the issuance of up to BRL10bn in promissory notes, the Brazilian equivalent to commercial paper, to help it finance a potential bid for Cimpor. The company has launched a tender offer for all of Cimpor’s shares for EUR5.75 a share, valuing the company’s equity at EUR3.86bn. CSN was rumored to have secured commitments from Banco do Brasil and Bradesco for its bid. CSN’s tender offer to shareholders goes through February 17. The BRL10bn amount suggests the company has left room, at least under its current filing, to increase the bid, which market participants believe could happen. Portuguese press also reported Monday that Camargo Correa, which made a competing verbal offer to merge operations with Cimpor, has offered to acquire Lafarge’s 17% stake in Cimpor. Based on Cimpor’s EUR6.25 closing price Monday, that stake could be worth EUR714m. BES is advising CSN. Credit Suisse and BofA-Merrill are advising Camargo Correa, and Deutsche Bank is advising Votorantim, which has yet to make a move.