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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
--------------------------
SCHEDULE 14D-1
TENDER OFFER STATEMENT
PURSUANT TO SECTION 14(D)(1) OF THE
SECURITIES EXCHANGE ACT OF 1934
(AMENDMENT NO. 1)
--------------------------
GIANT CEMENT HOLDING, INC.
(NAME OF SUBJECT COMPANY)
--------------------------
CP ACQUISITION, INC.
CEMENTOS PORTLAND, S.A.
(BIDDERS)
--------------------------
COMMON STOCK, $0.01 PAR VALUE
(TITLE OF CLASS OF SECURITIES)
374450104
(CUSIP NUMBER OF COMMON STOCK)
--------------------------
MANUEL DE MELGAR Y OLIVER
DIRECTOR GENERAL CORPORATIVO
CEMENTOS PORTLAND, S.A.
JOSE ABASCAL, 59
28003 MADRID, SPAIN
011-34-91-396-0100
(NAME ADDRESS AND TELEPHONE NUMBER OF PERSON AUTHORIZED TO
RECEIVE NOTICES AND COMMUNICATIONS ON BEHALF OF BIDDERS)
--------------------------
COPIES TO:
ANDREW C. CULBERT, ESQ. ELLEN J. ODONER, ESQ.
MASTERMAN, CULBERT & TULLY LLP WEIL, GOTSHAL & MANGES LLP
ONE LEWIS WHARF 767 FIFTH AVENUE
BOSTON, MASSACHUSETTS 02110 NEW YORK, NEW YORK 10153
850358 v.3
<PAGE>
- ----------------------------------------
CUSIP NO. 374450104
- ----------------------------------------
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
CP Acquisition, Inc.
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(See Instructions)
(a)[X]
(b)[ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCES OF FUNDS (See Instructions)
AF
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(E) OR 2(F) [ ]
N/A
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Delaware
- --------------------------------------------------------------------------------
7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
None
- --------------------------------------------------------------------------------
8 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 7 EXCLUDES CERTAIN SHARES
(See Instructions)
N/A [ ]
- --------------------------------------------------------------------------------
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 7
N/A
- --------------------------------------------------------------------------------
10 TYPE OF REPORTING PERSON (See Instructions)
CO
- --------------------------------------------------------------------------------
2
<PAGE>
- ----------------------------------------
CUSIP NO. 374450104
- ----------------------------------------
- --------------------------------------------------------------------------------
1 NAME OF REPORTING PERSON
S.S. OR I.R.S. IDENTIFICATION NO. OF ABOVE PERSON
CEMENTOS PORTLAND, S.A.
- --------------------------------------------------------------------------------
2 CHECK THE APPROPRIATE BOX IF A MEMBER OF A GROUP
(See Instructions)
(a)[X]
(b)[ ]
- --------------------------------------------------------------------------------
3 SEC USE ONLY
- --------------------------------------------------------------------------------
4 SOURCES OF FUNDS (See Instructions)
BK, WC
- --------------------------------------------------------------------------------
5 CHECK BOX IF DISCLOSURE OF LEGAL PROCEEDINGS IS REQUIRED PURSUANT TO
ITEMS 2(E) OR 2(F) [ ]
N/A
- --------------------------------------------------------------------------------
6 CITIZENSHIP OR PLACE OF ORGANIZATION
Kingdom of Spain
- --------------------------------------------------------------------------------
7 AGGREGATE AMOUNT BENEFICIALLY OWNED BY EACH REPORTING PERSON
None
- --------------------------------------------------------------------------------
8 CHECK BOX IF THE AGGREGATE AMOUNT IN ROW 7 EXCLUDES CERTAIN SHARES
(See Instructions)
N/A [ ]
- --------------------------------------------------------------------------------
9 PERCENT OF CLASS REPRESENTED BY AMOUNT IN ROW 7
N/A
- --------------------------------------------------------------------------------
10 TYPE OF REPORTING PERSON (See Instructions)
CO
- --------------------------------------------------------------------------------
3
<PAGE>
This Amendment No. 1 amends and supplements the Tender Offer
Statement on Schedule 14D-1 filed on November 10, 1999, by CP Acquisition, Inc.,
a Delaware corporation (the "BIDDER") and a wholly-owned subsidiary of Cementos
Portland, S.A., a public company (sociedad anunima) organized under the laws of
the Kingdom of Spain ("CP") with respect to the offer by Bidder to purchase for
cash all shares of Common Stock, $0.01 par value (the "SHARES"), of Giant Cement
Holding, Inc. (the "COMPANY"), a Delaware corporation.
ITEM 10. ADDITIONAL INFORMATION.
Clause (c) of Item 10 is supplemented as follows:
Parent and the Company have filed their Notification and Report Forms
with respect to the Offer under the HSR Act. The waiting period under the HSR
Act with respect to the Offer will expire at 11:59 p.m., New York City time, on
December 2, 1999, unless early termination of the waiting period is granted or
the waiting period is extended by a request for additional information from
either the Federal Trade Commission or the Department of Justice. The Offer is
conditioned, among other things, on the expiration or termination of the waiting
period under the HSR Act. See Section 15 of the Offer to Purchase.
ITEM 11. MATERIAL TO BE FILED AS EXHIBITS.
EXHIBIT NUMBER DESCRIPTION
- -------------- -----------
Exhibit (a)(9) English translation of presentation to
research analysts concerning CP's acquisition of
the Company.
4
<PAGE>
SIGNATURES
After due inquiry and to the best of my knowledge and belief, I
certify that the information set forth in this statement is true, complete and
correct.
Dated: November 19, 1999
CP ACQUISITION, INC.
By: /s/ MANUEL DE MELGAR Y OLIVER
--------------------------------------
Name: Manuel de Melgar y Oliver
Title: Vice President
CEMENTOS PORTLAND, S.A.
By: /S/ MANUEL DE MELGAR Y OLIVER
--------------------------------------
Name: Manuel de Melgar y Oliver
Title: Director General Corporativo
(Managing Director)
5
<PAGE>
EXHIBIT INDEX
DESCRIPTION
EXHIBIT NUMBER DESCRIPTION
- -------------- -----------
(a)(9) English translation of presentation to research analysts
concerning CP's acquisition of the Company.
6
EXHIBIT (A)(9)
7
<PAGE>
[GRAPHIC OMITTED]
PRESENTATION TO
RESEARCH ANALYSTS
ACQUISITION OF GIANT CEMENT
12 NOVEMBER 1999
851456 v.1
<PAGE>
CONTENTS
o Introduction
o Rationale of the acquisition
o Description of Giant Cement
o Description of the transaction
o Impact in Cementos Portland
2
<PAGE>
INTRODUCTION
3
<PAGE>
CP HAS LAUNCHED A FRIENDLY TENDER OFFER FOR 100% OF GIANT FOR $281 MILLION
o Represents one step further in CP's expansion plan based on opportunistic
acquisitions
o Expansion in a market well understood by CP
o Expansion in the attractive US market
o Giant's cement plants, together with CP's plant in Maine, will enhance CP's
competitive position on the Atlantic coast
o Positive impact on CP's earnings per share
4
<PAGE>
Rationale of the acquisition
5
<PAGE>
Why Invest in the US?
o The US market has a cement production capacity deficit of about 20%,
concentrated mainly in the coastal areas.
o In 1998, Congress approved TEA 21, which will increase public spending on
highways by about $217 billion (+40%) in the 1999-2005 period.
[Graphic containing the information shown below]
<TABLE>
<CAPTION>
- ----------------- ----------------------------------------------- --------------------------------------------------------------
YEAR TOTAL CEMENT CONSUMPTION (M TONS) CURRENT AND ESTIMATED FUTURE CAPACITY
- ----------------- ----------------------------------------------- --------------------------------------------------------------
<S> <C> <C>
1991 79 79
- ----------------- ----------------------------------------------- --------------------------------------------------------------
1992 84 80
- ----------------- ----------------------------------------------- --------------------------------------------------------------
1993 88 80
- ----------------- ----------------------------------------------- --------------------------------------------------------------
1994 93 80
- ----------------- ----------------------------------------------- --------------------------------------------------------------
1995 95 81
- ----------------- ----------------------------------------------- --------------------------------------------------------------
1996 100 81
- ----------------- ----------------------------------------------- --------------------------------------------------------------
1997 106 82
- ----------------- ----------------------------------------------- --------------------------------------------------------------
1998 108 82
- ----------------- ----------------------------------------------- --------------------------------------------------------------
1999e 116 87
- ----------------- ----------------------------------------------- --------------------------------------------------------------
2000e 119 91
- ----------------- ----------------------------------------------- --------------------------------------------------------------
2001e 121 98
- ----------------- ----------------------------------------------- --------------------------------------------------------------
2002e 123 109
- ----------------- ----------------------------------------------- --------------------------------------------------------------
2003e 126 110
- ----------------- ----------------------------------------------- --------------------------------------------------------------
</TABLE>
Source: Portland Cement Association (historic figures).
6
<PAGE>
WHY INVEST IN THE US?
o The expected increase in public spending on highways should favor Giant's
regional markets in particular
o TEA 21 should compensate any economic slowdown produced by rising interest
rates
ANNUAL INCREASE IN HIGHWAY SPENDING BY STATE
$ million % increase
South Carolina 184 79%
Georgia 377 70%
Virginia 256 62%
North Carolina 262 55%
Pennsylvania 416 47%
New York 354 35%
New Jersey 157 30%
Total/Average 2,006 53%
Source: US House of Representatives Transportation and Infrastructure
Committee
7
<PAGE>
WHY INVEST IN GIANT?
o Appropriate size
o Stock market opportunity
o Lack of interest in small, cyclical, industrial companies
o Unjustified stock market discount applied to the construction sector
in the context of future possible interest rate hikes
o Value of the resource recovery business not recognized
o Acquisition opportunities are becoming scarce with sector consolidation
o Improved competitive position of CP in the US
8
<PAGE>
DESCRIPTION OF GIANT CEMENT
9
<PAGE>
Location of facilities
[There is a map of the Northeast part of the United States showing the location
of facilities. The information contained in the map is described below].
<TABLE>
<CAPTION>
- ----------------------------------------------------------------- --------------------------------------------------------------
<S> <C>
Cement manufacturing Pennsylvania and South Carolina
- ----------------------------------------------------------------- --------------------------------------------------------------
Cement terminal (4) Georgia, North Carolina (2), and Virginia
- ----------------------------------------------------------------- --------------------------------------------------------------
Lightweight aggregates (3) North Carolina and Virginia (2)
- ----------------------------------------------------------------- --------------------------------------------------------------
Block manufacturing (5) North Carolina (3) and Virginia (2)
- ----------------------------------------------------------------- --------------------------------------------------------------
Fuel Blending (2) Alabama and South Carolina
- ----------------------------------------------------------------- --------------------------------------------------------------
Aggregates Pennsylvania
- ----------------------------------------------------------------- --------------------------------------------------------------
Market of CDN-USA Maine
- ----------------------------------------------------------------- --------------------------------------------------------------
</TABLE>
Source: Giant Cement management
[GRAPHIC OMITTED]
10
<PAGE>
OPERATIONS AND MARKET SHARES
<TABLE>
<CAPTION>
MARKET SHARE IN
CAPACITY RELEVANT MARKETS MARKET POSITION
-------- ---------------- ---------------
<S> <C> <C> <C> <C>
Cement
Production (US tons) 1,550,000 11% 4th largest on east coast
Terminal (US tons) 500,000
Lightweight aggregates (US tons) 600,000 40% Largest on east coast
Resource recovery (US tons) 225,000 20% Largest in US
Aggregates (US tons) 1,000,000 less than 10%
Concrete blocks (units) 18,000,000 less than 10%
Source: Giant Cement management
</TABLE>
11
<PAGE>
EXPECTED BREAKDOWN OF SALES
Sales 2000e Sales 2004e
----------- -----------
Resource
recovery 25% 25%
LWA 7% 7%
Blocks 9% 8%
Terminal 2% 7%
Cement 57% 53%
Source: CP estimates
12
<PAGE>
CEMENT DIVISION
o Giant is among the 15 largest US cement producers and ranks fourth on the
east coast
o Giant has recently enlarged its target market with the acquisition of
the Norfolk terminal (put-through capacity in excess of 500,000 tons
per year)
o The use of waste as fuel reduces Giant's net fuel costs to about $0
per ton vs. the US cement industry average of $3.5-$4.0 per ton of
clinker
[A map of the Northeast part of the US describing the different activities in
the different states. The information contained in the map is described below].
<TABLE>
<CAPTION>
- ----------------------------------------------------------------- --------------------------------------------------------------
<S> <C>
Pennsylvania - Aggregates (1,000,000 tons)
- Cement plant. Clinker capacity of 600,000 tons. Grinding
capacity of 750,000 tons. 2 wet process kilns. Limestone
quarry of 200 acres (reserves for 50+ years). 1,000 acres of
land.
- ----------------------------------------------------------------- --------------------------------------------------------------
Virginia Norfolk terminal (500,000 tons)
- ----------------------------------------------------------------- --------------------------------------------------------------
North Carolina 2 Bag warehouse and bulk terminal.
- ----------------------------------------------------------------- --------------------------------------------------------------
South Carolina Cement plant. Clinker capacity of 840,000 tons. Grinding
capacity of 950,000 tons. 4 wet process kilns. Limestone
quarry of 230 acres (reserves for 50 + years). 2,100 acres
of land.
- ----------------------------------------------------------------- --------------------------------------------------------------
Georgia Bag warehouse
- ----------------------------------------------------------------- --------------------------------------------------------------
Maine CDN-USA
- ----------------------------------------------------------------- --------------------------------------------------------------
</TABLE>
13
<PAGE>
LIGHTWEIGHT AGGREGATES AND BLOCKS DIVISION
o Acquired in April 1998, the "Solite" division operates three
lightweight aggregates plants and five concrete block plants
o The lightweight aggregates manufacturing facilities have a
combined production capacity of 600,000 tons; each plant has a
resource recovery burning permit
o The concrete block facilities have a combined capacity of 18
million blocks, which are marketed to masonry and construction
contractors and building materials dealers
[A map of the Northeast part of the US showing the market areas and the location
of the facilities that produce lightweight aggregates and blocks. The
information contained in this map is described below].
<TABLE>
<CAPTION>
- ----------------------------------------------------------------- --------------------------------------------------------------
<S> <C>
Lightweight aggregates - Aguadale, NC (175,000 tons)
- Cascade, VA (225,000 tons)
- Avonia, VA (200,000 tons)
- ----------------------------------------------------------------- --------------------------------------------------------------
Concrete blocks - Charlotte, NC (3.5m units)
- Lexington, NC (3.5m units)
- Eden, NC (5.5m units)
- Lynchburg, VA (3.0m units)
- South Boston, VA (2.5m units)
- ----------------------------------------------------------------- --------------------------------------------------------------
- ----------------------------------------------------------------- --------------------------------------------------------------
Lightweight aggregates market area South Carolina, North Carolina, Virginia and West Virginia.
- ----------------------------------------------------------------- --------------------------------------------------------------
Concrete blocks market area Northern Florida, eastern Alabama,
Georgia, South Carolina, Nrth
Carolina, Virginia, West Virginia
Pennsylvania, DC, eastern Ohio,
eastern Kentucky and eastern
Tennessee.
- ----------------------------------------------------------------- --------------------------------------------------------------
</TABLE>
14
<PAGE>
DETAILS OF THE RESOURCE RECOVERY BUSINESS
o "Resource recovery" - the use of industrial waste as fuel in the cement and
lightweight aggregates manufacturing process--is closely related to Giant's
core business
- ------------ |\ ------------------- |\ ---------------------
----------| \ -| \ Burning of waste as
Producers of Collected | \ Waste treatment in | \ fuel in Giant's
industrial by Giant | / Giant's two fuel | / cement and
waste ----------| / blending facilities -| / lightweight
|/ |/ aggregates plants
- ------------ ------------------- ---------------------
o Giant charges for waste collection
o Cement and lightweight aggregates divisions charge for waste
incineration
o Resource recovery division pays for the incineration service
o Virtually 100% autoconsumption
15
<PAGE>
COMPARATIVE ANALYSIS (BASED ON PROJECTIONS FOR 2000E)
<TABLE>
<CAPTION>
Pta millions
-------------------------------------------------- Resource
Cement capacity recovery sales
Net income after
Sales EBITDA minorities & taxes `000 Tm Pta millions
----- ------------ ------------------ ------- ------------
<S> <C> <C> <C> <C> <C>
CP/Giant 2.3x 3.5x 4.3x 5.9x 0.0x
CP 74,300 30,800 16,200 8,200 0
Giant 31,800 8,900 3,800 1,400 4,800
Note: Assumes an exchange rate of 1$ = 158 pesetas
</TABLE>
16
<PAGE>
FUTURE EVOLUTION OF GIANT
o Volume growth (1% annual)
o Price increases (2%-3% per annum, nominal)
o Full integration of "Solite" (lightweight aggregates) and Southeastern
Chemical (resource recovery), acquired in 1998 and 1999, respectively
o Entry into new markets with the Norfolk terminal, operative from
2000-2001, through which Giant can meet the expected growth in demand
o Recurrent capital expenditures of about $15 million per year
[Graphic with the information described below]
<TABLE>
<CAPTION>
- ------------------ ---------------------------------------------------- --------------------------------------------------------
YEAR SALES* EBITDA MARGIN
- ------------------ ---------------------------------------------------- --------------------------------------------------------
<S> <C> <C>
2000e 201 28%
- ------------------ ---------------------------------------------------- --------------------------------------------------------
2001e 212 29%
- ------------------ ---------------------------------------------------- --------------------------------------------------------
2002e 224 29%
- ------------------ ---------------------------------------------------- --------------------------------------------------------
2003e 234 29%
- ------------------ ---------------------------------------------------- --------------------------------------------------------
2004e 244 30%
- ------------------ ---------------------------------------------------- --------------------------------------------------------
</TABLE>
* millions of $
17
<PAGE>
DESCRIPTION OF THE TRANSACTION
18
<PAGE>
OVERVIEW OF THE TENDER OFFER
o Offer for 100% of Giant at a cash price of $31 per share
o Offer is friendly and recommended by Giant's board
o Launch on November 10, with an acceptance period of 20 business days
o Subject to obtaining a majority stake
o Financed with a short-term bank facility, to be converted into
long-term debt
19
<PAGE>
AMOUNT OF THE OFFER
$ millions Pta millions
Shares 270.7 42,957
Options 10.4 1,657
---------- ----------
Total cost of equity 281.1 44,614
Net debt assumed 62.2 9,872
---------- ----------
Total enterprise value (EV) 343.3 54,486
20
<PAGE>
WHAT IS IMPLIED BY A PRICE OF $31 PER SHARE?
<TABLE>
<CAPTION>
TRANSACTION MULTIPLES PREMIA
--------------------- ---------------------
With respect to the average price of the:
<S> <C> <C> <C>
EV/EBITDA 2000e 6.1x Last three months* 38%
PE 2000e 11.8x Last twelve months* 42%
*Prior to the announcement of the offer
o Equivalent to the price reached in July, 1998
(historic maximum)
</TABLE>
21
<PAGE>
IMPACT IN CEMENTOS PORTLAND
22
<PAGE>
PRO FORMA PROFIT AND LOSS ACCOUNT
<TABLE>
<CAPTION>
PROJECTIONS FOR 2000E (Pta millions)
----------------------------------------
CP GIANT ADJUST. PRO FORMA % CHANGE
--------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
Revenues 74,300 31,800 106,100 +43%
EBITDA 30,800 8,900 39,700 +29%
Goodwill amort. (2,672) (1,400) (4,072)
EBIT 22,100 6,300 (1,400) 27,000 +22%
Interest expense (1,300) (600) (2,900) (4,800)
Net profit (to parent) 16,200 3,800 (3,300) 16,700 +3%
</TABLE>
23
<PAGE>
IMPACT IN CP'S EPS (GROUP)
REPORTED EPS (PESETAS)
1998 1999E 2000E 2001E 2002E 2003E
---- ----- ----- ----- ----- -----
EPS ACCRETION 0% 0% +3% +6% +9% +12%
CP EPS 461 600 582 531 558 577
PRO FORMA EPS 461 600 599 564 610 647
Note: Assumes that the goodwill generated in the acquisition is amortized
over a period of 20 years
Source: CP projections
24
<PAGE>
IMPACT ON GROUP INDEBTEDNESS
o CP could pay down its existing debt plus the debt assumed in the
acquisition in 4 to 5 years
o CP will maintain sufficient financial flexibility to be able to continue to
pay dividends, make additional acquisitions or return capital to
shareholders
Pro forma estimated net debt of the CP group
- --------------------------------------------
[Graphic with the information described below]
<TABLE>
<CAPTION>
- ------------- ----------------------------------------------- ----------------------------------
YEAR PRO FORMA NET DEBT OF CP GROUP
(MILLIONS OF PESETAS) NET DEBT/EBITDA
- ------------- ----------------------------------------------- ----------------------------------
<S> <C> <C>
1999e 72,000
- ------------- ----------------------------------------------- ----------------------------------
2000e 54,000 1.4x
- ------------- ----------------------------------------------- ----------------------------------
2001e 38,000 0.9x
- ------------- ----------------------------------------------- ----------------------------------
2002e 21,000 0.5x
- ------------- ----------------------------------------------- ----------------------------------
2003e 3,000 0.1x
- ------------- ----------------------------------------------- ----------------------------------
Sector average 1.7x
</TABLE>
25
