STXNEWS LATAM-CSN bid for Thyssen's Brazil unit 'negative' for stock-BofA

Mon Dec 3, 2012 8:21am EST

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Cia Siderúrgica Nacional SA's potential purchase of the Brazilian slab-making unit of ThyssenKrupp AG would be negative for shares, according to a note by Bank of America Merrill Lynch analysts on Monday. Bloomberg News reported on Friday that CSN, as Cia Siderúrgica is known, could pay $3 billion to buy CSA, as Thyssen's unit is known.

According to the analysts, led by Thiago Lofiego, it is hard to "find value" in the purchase; the deal could leave CSN, as Brazil's No. 2 producer of flat steel products is known, more indebted than now. Lofiego and his team added that Thyssen's CSA is a loss-making mill that requires massive investments.

Currently, Bank of America Merrill Lynch has an "underperform" recommendation with a 10.50 reais price target for the next 12 months.

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Comments (1)
ArcturusRex wrote:
I’m not certain I understand the point of this article. It seems the author is saying:

1) Buying ThyssenKrupp AG would be a bad idea

and

2) CSN is looking at whether or not buying ThyssenKrupp AG might be a good idea.

So, I believe what we have here is an analyst who already believes ThyssenKrupp AG is a bad idea. Is that it? So BofA votes no on that deal?

Whay would that be a negative for the stock as the headline implies? Are we all worried than CSN won’t arrive at the same conclusion? Why?

Dec 04, 2012 6:38pm EST  --  Report as abuse
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