Gerdau Ameristeel Announces Tender Offer For Chaparral Steel Senior Notes



    TAMPA, FL, Aug. 30 /CNW/ - Gerdau Ameristeel Corporation (NYSE:   GNA; TSX:
GNA.TO) today announced it has commenced a cash tender offer to purchase any
and all of Chaparral Steel Company's ("Chaparral") outstanding 10% Senior
Notes due 2013 (the "Notes"), as well as a related consent solicitation to
amend the indenture governing the Notes. The tender offer and consent
solicitation are being conducted in connection with the Company's previously
announced agreement to acquire Chaparral, and is subject to, among other
conditions, the closing of the acquisition of Chaparral. The tender offer and
consent solicitation are being made upon the terms and subject to the
conditions set forth in the Offer to Purchase and Consent Solicitation
Statement dated August 30, 2007 (the "Offer to Purchase") and the related
Consent and Letter of Transmittal.
    The total consideration to be paid for each validly tendered Note,
subject to the terms and conditions of the tender offer and consent
solicitation, will be paid in cash and calculated based in part on the 3.625%
U.S. Treasury Note due July 15, 2009 (the "Reference Security"). The total
consideration for each $1,000 principal amount of Notes will be equal to (i)
the present value of $1,050.00 (the earliest redemption price payable on July
l5, 2009, the earliest redemption date, for such principal amount of Notes)
discounted to the Early Settlement Date (as defined below) from the earliest
redemption date, plus the present value on the Early Settlement Date of all
interest that would accrue from the most recent interest payment date to, but
not including, the earliest redemption date, in each case determined at a
yield equal to the sum of (*) the yield to maturity of the Reference Security
specified above as calculated by J.P. Morgan Securities Inc. (the "Dealer
Manager") in accordance with standard market practice, based on the bid price
for such Reference Security as of the Price Determination Date (as defined
below), as displayed on page PX4 of the Bloomberg Government Pricing Monitor,
or any other source selected by the Dealer Manager if the Bloomberg Government
Pricing Monitor is not available or is manifestly erroneous, and (y) a fixed
spread of 50 basis points, minus (ii) any accrued and unpaid interest from the
most recent interest payment date to, but not including, the applicable
Settlement Date.
    The total consideration is payable only in respect of Notes validly
tendered with consents, and not withdrawn, on or prior to the Early Consent
Date (as defined below) and purchased in the tender offer. The total
consideration includes a payment of $30.00 per $1,000 principal amount of
Notes (the "Early Consent Payment") payable only in respect of Notes validly
tendered and with consents delivered on or prior to the Early Consent Date.
Holders validly tendering Notes after the Early Consent Date and on or prior
to the Expiration Date will be eligible to receive only an amount equal to the
total consideration less the Early Consent Payment (the "offer
consideration"). Holders whose Notes are purchased in the tender offer will
also be paid accrued and unpaid interest from the last interest payment date
to, but not including, the applicable Settlement Date. The Company expects
that the Price Determination Date will be 2:00 p.m., New York City time on
September 14, 2007, unless extended by the Company in its sole discretion.
    A detailed methodology for calculating the total consideration and the
offer consideration for Notes, as well as a hypothetical example of the
calculation of the total consideration and the offer consideration are set
forth in the Offer to Purchase.
    The Company is also soliciting consents from holders of the Notes for
certain proposed amendments which would eliminate substantially all of the
restrictive covenants in the indenture governing the Notes and certain of the
events of default, as well as modify certain other provisions contained
therein (the "Amendments"). Adoption of the Amendments requires the consent of
holders of a majority of the aggregate principal amount of Notes outstanding.
    The consent solicitation and withdrawal rights will expire at 5:00 p.m.,
New York City time, on Friday, September 14, 2007, unless earlier terminated
or extended (such date and time, as the same may be extended, the "Early
Consent Date"). Holders who validly tender their Notes at or prior to 5:00
p.m., New York City time, on the Early Consent Date will be eligible to
receive the total consideration. Holders who validly tender their Notes after
5:00 p.m., New York City time, on the Early Consent Date, and at or prior to
5:00 p.m., New York City time, on Friday, September 28, 2007 (the "Expiration
Date"), will be eligible to receive only the offer consideration.
    The "Settlement Date" will be either the "Early Settlement Date" or the
"Final Settlement Date", as applicable. The "Early Settlement Date" is
expected to be the second business day following the Early Consent Date. The
"Final Settlement Date" is expected to be the second business day following
the Expiration Date. Holders whose Notes are purchased will be paid accrued
and unpaid interest up to, but not including, the applicable Settlement Date.
    Holders who tender their Notes must consent to the Amendments. Holders
must validly tender their Notes and deliver their consents at or prior to 5:00
p.m., New York City time, on the Early Consent Date in order to be eligible to
receive the total consideration; holders tendering Notes after 5:00 p.m., New
York City time, on Early Consent Date will only be eligible to receive the
offer consideration. Tendered Notes may not be withdrawn and consents may not
be revoked after 5:00 p.m., New York City time, on the Early Consent Date. The
tender offer and the consent solicitation are subject to the satisfaction of
certain conditions, including receipt of consents in respect to at least a
majority of the principal amount of Notes and the closing of the acquisition
of Chaparral by the Company.
    J.P. Morgan Securities Inc. is the sole Dealer Manager for the tender
offer and the consent solicitation and can be contacted at (212) 270-1477
(collect). Global Bondholder Services Corporation is the Information Agent and
the Depositary for the tender offer and the consent solicitation and can be
contacted at (212) 430-3774 (collect) or toll free at (866) 952-220.
    This press release is for informational purposes only and is neither an
offer to purchase nor a solicitation of an offer to sell the Notes. The offer
to buy the Notes is being made pursuant to the tender offer documents,
including the Offer to Purchase and the related Consent and Letter of
Transmittal that the Company is distributing to holders of Notes. The tender
offer is not being made to holders of Notes in any jurisdiction in which the
making or acceptance thereof would not be in compliance with the securities,
blue sky or other laws of such jurisdiction.

    About Gerdau Ameristeel

    Gerdau Ameristeel is the second largest mini-mill steel producer in North
America with annual manufacturing capacity of over 9.0 million tons of mill
finished steel products. Through its vertically integrated network of 17
mini-mills (including one 50% owned joint venture mini-mill), 17 scrap
recycling facilities and 52 downstream operations, Gerdau Ameristeel serves
customers throughout North America. The company's products are generally sold
to steel service centers, steel fabricators, or directly to original equipment
manufactures for use in a variety of industries, including construction,
cellular and electrical transmission, automotive, mining and equipment
manufacturing. The common shares of Gerdau Ameristeel are traded on the New
York Exchange and the Toronto Stock Exchange under the symbol GNA.

    Forward Looking Statements

    This press release contains forward looking statements with respect to
Gerdau Ameristeel Corporation, including its business operations, strategy,
financial performance, and condition. Although management believes that the
expectations reflected in such forward looking statements are reasonable, such
statements involve risks and uncertainties. Actual results may differ
materially form those expressed or implied by such forward looking statements.
Factors that could cause actual results to differ materially from expectations
include, among other things, risk related to completing the transaction, and
general economic and market factors, including demand for steel products,
availability and costs of electricity, natural gas and raw materials,
government regulations and trade policies affecting steel imports or exports
in Canada and the United States, and other factors discussed in materials
filed with applicable securities regulatory authorities from time to time.

    For additional financial and investor information, visit
www.gerdauameristeel.com

    %SEDAR: 00000593E




For further information:

For further information: Barbara R. Smith at (813) 319-4324

Organization Profile

GERDAU AMERISTEEL CORPORATION

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