Swiss giant Holderbank and Portugal's second-largest cement producer, Secil, launched a modified takeover bid in response to the overwhelming vote (nearly 70%) by shareholders of Cimpor, Portugal's largest cement maker, against the original US$3 billion offer. The move, according to a statement released by Holderbank, is designed to overcome misgivings about an abolition of restrictions on voting rights as voiced in the follow-up to a general meeting held by Cimpor in mid-August. Secil is raising its cash offer through subsidiary Secilpar by about 15% from US$22.40 to US$25.67.

Shortly after this new bid was announced, Portugal's finance minister rejected the offer, making it clear that, under Portuguese law, investors cannot bid for more than 10% of a company that is being privatized. (Cimpor is scheduled for privatization later this year.) The general meeting where the shareholder vote took place, held Aug. 11, was actually a vote to remove the 10% limit on voting rights in the company.

At the center of the modified takeover bid is an attempt to strengthen the Portuguese shareholdership of the "new Cimpor" and meet Portuguese government expectations. To this end, the offer envisages the acquisition of at least 51% of the share capital (the earlier precondition stipulated a majority of 67%). This reduction would give local shareholder groups a chance to play a more active role in the executive management of Cimpor jointly with Holderbank, which has made it clear that it would use Cimpor as a platform for existing and future interests. Both Secil and Holderbank have openly criticized the minister's stance on ownership, but vowed to not give up their effort to take over Cimpor.

Shortly after the first bid came in mid-July, Cimpor issued a strong defense document, which stated that the initial offer was "clearly inadequate." Sales at Cimpor for the first five months of 2000 were US$554 million, almost 31% higher than the same period in 1999.