(Note: all dollar amounts in this press release are expressed in
United States dollars)
TAMPA, FL, June 2 /PRNewswire-FirstCall/ - Gerdau Ameristeel
Corporation (NYSE: GNA, TSX: GNA) and Gerdau S.A. (Bovespa: GGBR,
NYSE: GGB, Latibex: XGGB) announced today that Gerdau S.A. has
delivered to the Board of Directors of Gerdau Ameristeel a proposal
to acquire all of the shares of Gerdau Ameristeel Corporation that
Gerdau S.A. does not already own for US$11.00 cash per share.
This proposal values Gerdau Ameristeel's minority held shares at
approximately US$1.6 billion. Gerdau
S.A. already owns 66.3% of the outstanding shares of Gerdau
Ameristeel and intends to fund the acquisition and related expenses
through its existing cash resources and committed financing.
The Gerdau Ameristeel Board of Directors has established a
Special Committee of independent directors to, among other things,
supervise the preparation of a formal valuation and oversee the
finalization of a definitive agreement in connection with the
proposal.
The Special Committee has retained RBC Capital Markets ("RBC")
as its independent valuator for the purpose of providing a
valuation in accordance with applicable regulatory requirements.
RBC has delivered its valuation to the Special Committee, which
concludes that the value of the common shares of Gerdau Ameristeel
is in the range of US$11.00 to
US$13.00 per share. RBC has also delivered its opinion that
the consideration under the proposal of US$11.00 per share is fair from a financial point
of view to the shareholders of Gerdau Ameristeel, other than Gerdau
S.A. and its related parties. The price of US$11.00 per share represents a premium of 53.4%
to the closing share price of Gerdau Ameristeel on the NYSE on
June 1, 2010 and a premium of 45.9%
to the 30-day volume weighted average price of the shares on the
NYSE.
The Board of Directors of Gerdau Ameristeel - having considered,
among other things, the unanimous recommendation of the Special
Committee - has unanimously determined (the representatives of
Gerdau S.A. on the Board of Directors of Gerdau Ameristeel having
abstained from voting) that it would support a transaction at the
price contemplated by the proposal, subject to finalization of
definitive documentation for the transaction.
Once Gerdau Ameristeel is wholly-owned by Gerdau S.A., the
combined business would be expected to benefit from additional
business development opportunities in the context of Gerdau S.A.'s
global strategy. As a wholly-owned subsidiary of Gerdau S.A.,
Gerdau Ameristeel would be expected to realize global synergies and
enjoy a lower cost of funding as a result of Gerdau S.A.'s stronger
credit ratings.
Chairman of the Board of Directors of Gerdau S.A., Jorge Gerdau Johannpeter, commented: "We believe
this transaction represents an excellent opportunity for Gerdau
Ameristeel's public shareholders to monetize their holdings at a
price that represents full and fair value and is in the best
interests of Gerdau S.A. and Gerdau Ameristeel, its public
shareholders and other stakeholders."
It is contemplated that the transaction would be implemented
pursuant to a plan of arrangement and that, subject to completion
of definitive documentation for the transaction, a management
information circular would be prepared and mailed for a special
meeting of Gerdau Ameristeel shareholders that would be held early
in the third quarter of 2010. The Board of Directors of Gerdau
Ameristeel has established June 18,
2010 as the record date for determining shareholders
entitled to vote at the special meeting.
The information circular to be sent to shareholders would
include full details of the terms of the transaction, the
recommendation to shareholders by the Board of Directors of Gerdau
Ameristeel and the Special Committee, as well as a formal valuation
report on the shares of Gerdau Ameristeel and fairness opinion
prepared by RBC Capital Markets, the independent valuator retained
by the Special Committee.
The transaction will be subject to usual conditions for a plan
of arrangement including the approval of a majority of Gerdau
Ameristeel shareholders represented in person or by proxy at the
special meeting of shareholders, other than Gerdau S.A. and its
related parties.
J.P. Morgan is acting as exclusive financial advisor to Gerdau
S.A. in the context of this transaction.
About Gerdau S.A.
-----------------
Gerdau S.A. is the leading producer of long steel in the
Americas and one of the world's largest suppliers of special long
steel. It has plants in 14 countries spanning the Americas,
Europe and Asia, with total installed capacity of more
than 25 million metric tons of steel. It is the largest recycler in
Latin America, transforming
millions of metric tons of scrap into steel every year. With over
140,000 shareholders, Gerdau S.A.'s publicly-held companies are
listed in the stock exchanges of São Paulo (Bovespa: GGBR4, GGBR3,
GOAU4, GOAU3 and AVIL3), New York
(NYSE: GNA, GGB), Toronto (GNA:
TO), Madrid (Latibex: XGGB) and
Lima (BVL: SIDERC1).
About Gerdau Ameristeel
-----------------------
Gerdau Ameristeel is the second largest mini-mill steel producer
in North America, with annual
manufacturing capacity of approximately 10 million metric tons of
mill finished steel products. Through its vertically integrated
network of mini-mills, scrap recycling facilities and downstream
operations, Gerdau Ameristeel serves customers throughout
the United States and Canada. The Company's products are generally
sold to steel service centers, steel fabricators, or directly to
original equipment manufacturers for use in a variety of
industries, including non-residential, infrastructure, commercial,
industrial and residential construction, metal building,
manufacturing, automotive, mining, cellular and electrical
transmission and equipment manufacturing. Gerdau Ameristeel's
majority shareholder is Gerdau S.A.
Forward Looking Statements
--------------------------
This release contains forward-looking statements relating to the
proposed acquisition by Gerdau S.A. of the shares of Gerdau
Ameristeel that Gerdau S.A. does not already own, including
statements regarding the completion of the proposed transaction and
other statements that are not historical facts. Such
forward-looking statements are subject to important risks and
uncertainties including, without limitation, negotiation and
finalization of definitive documentation for the transaction,
approval of applicable governmental authorities, required Gerdau
Ameristeel shareholder approval and necessary court approvals if
the transaction is implemented by way of a plan of arrangement. As
a result of these risks and uncertainties, the proposed transaction
could be modified, restructured or not be completed, and the
results or events predicted in these forward-looking statements may
differ materially from actual results or events. These
forward-looking statements are not guarantees of future
performance, given that they involve risks and uncertainties.
Gerdau S.A. and Gerdau Ameristeel do not assume and expressly
renounce any obligation to update any of these forward-looking
statements, which are only applicable on the date on which they
were made. Additionally, Gerdau S.A. and Gerdau Ameristeel
undertake no obligation to comment on expectations of, or
statements made by third parties in respect of the proposed
transaction.
SOURCE Gerdau Ameristeel Corporation