Announcement of Offer to Purchase for Cash Any and All of the Outstanding 4.875% Notes due 2027 issued by Gerdau Trade Inc.
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jun 03 2025
0mins
Should l Buy GGB?
Source: PRnewswire
Gerdau Trade Inc. Offer: Gerdau S.A.'s subsidiary, Gerdau Trade Inc., has initiated a cash offer to purchase all outstanding 4.875% notes due in 2027, with the offer set to expire on June 9, 2025, unless extended or terminated early.
Conditions and Settlement: The acceptance of the notes is contingent upon certain conditions being met, including a successful debt offering, and settlement is expected to occur within three business days after the expiration date.
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Analyst Views on GGB
About GGB
Gerdau SA is a Brazil-based manufacturer of steel products. The Company is engaged in the production and commercialization of steel products in general, through its mills located in Argentina, Brazil, Canada, Colombia, the United States, Mexico, Peru, the Dominican Republic, Uruguay and Venezuela. The Firm’s product portfolio includes crude steel; finished products for the construction industry, such as rebar, wire-rods, structural shapes, hot-rolled coils and heavy plates; finished industrial products, such as commercial rolled-steel bars, light profiles and wires; agricultural products, such as stakes, smooth wire and barbed-wire; and special steel items. The Company’s activities include also operations of iron ore mines located in the state of Minas Gerais.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Surge in Trading Volume: Trading volume reached 63 million shares, about 286% above the three-month average of 16.3 million shares, indicating a significant increase in market interest and potentially signaling enhanced investor confidence in the steel sector.
- Industry Outlook: With 130,000 jobs added in January and unemployment falling to 4.3%, investors are optimistic about a recovery in steel-intensive sectors like construction, which could drive steel prices higher and provide strong market support for producers.
- Long-Term Growth Potential: Gerdau's stock has surged 1,370% since its IPO in 1999, currently trading near a 52-week high and up 45% over the past six months, showcasing the company's robust performance and future growth potential in the steel market.
See More
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- Company Stake Reduction: Brazil's Gerdaus has reduced its stake in the company to 4.39% of the preferred shares.
- Filing Announcement: The reduction in stake was disclosed through a formal filing.
See More
Kawa Capital Management Fully Exits Gerdau S.A. with $6.49 Million Transaction
- Full Liquidation: Kawa Capital Management sold all 2,094,404 shares of Gerdau S.A. in Q4 2023 for approximately $6.49 million, reducing its exposure from 11.8% to 0%, indicating a strategic shift in risk management.
- Portfolio Shift: Following the liquidation, Kawa's top holdings now include BDN ($15.73 million, 36.4%), ONL ($12.54 million, 29.0%), and others, reflecting a pivot towards real estate and diversified materials companies.
- Stock Performance: As of January 20, 2023, Gerdau's shares were priced at $4.16, up 47% over the past year, significantly outperforming the S&P 500's 14% gain, showcasing the company's strong market position and pricing discipline.
- Investor Outlook: Gerdau's latest earnings report highlighted steady cash generation and ongoing capital returns, including dividends and buybacks, despite a normalization in steel markets, presenting a positive outlook for long-term investors focused on durability.
See More
Kawa Capital Fully Exits Gerdau S.A. Position with $6.49 Million Transaction
- Position Liquidation: Kawa Capital sold 2,094,404 shares of Gerdau S.A. in Q4, with an estimated transaction value of $6.49 million, marking a reduction of its exposure from 11.8% to 0%, indicating a focus on risk management.
- Market Performance: As of January 20, Gerdau S.A. shares were priced at $4.16, reflecting a 47% increase over the past year, significantly outperforming the S&P 500's 14% gain during the same period, showcasing the company's strong performance in the steel market.
- Financial Health: In its latest earnings report, Gerdau highlighted steady cash generation and ongoing capital returns, including dividends and buybacks, despite the normalization of steel markets, demonstrating financial flexibility and a robust balance sheet.
- Investment Strategy Shift: The complete exit from Gerdau S.A. suggests that Kawa Capital may be restructuring its portfolio and managing risk after a significant stock price rally, shifting focus towards more diversified real estate and materials assets.
See More
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- Global Value Investment Opportunities: The Benzinga Value Ranking system identifies the top ten non-U.S. value stocks by integrating multiple valuation metrics, assisting investors in finding margin of safety and upside potential in a mispriced market.
- Valuation Dispersion Phenomenon: Outside the U.S., many profitable and asset-rich companies are overlooked, trading at single-digit earnings multiples, highlighting extreme valuation dispersion that presents potential investment opportunities.
- Risk Management Advantage: By focusing on the top decile of the Benzinga Value Ranking, investors can access the cheapest segment of the global market, thereby reducing risk as these stocks typically come with lower expectations.
- Long-Term Growth Potential: As we approach 2026, the Benzinga Value Ranking provides a systematic approach to uncover overlooked global stocks, which, while not guaranteed winners, offer limited downside risk and significant upside potential.
See More
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Market Sentiment: Despite markets nearing all-time highs, investor sentiment has shifted from exuberance to cautious optimism, influenced by weak employment numbers and potential economic hardships from a federal government shutdown.
Value Stocks Recommendation: Investors with significant unrealized gains are advised to consider reallocating to value stocks to minimize losses and generate income through dividends, especially in light of potential market corrections.
Highlighted Value Stocks: Five value stocks are recommended for portfolio protection, including Sasol Ltd., Gerdau SA, Ecopetrol SA, Seaboard Corp., and Fluor Corp., each with strong fundamentals and favorable Benzinga Edge Value scores.
Technical Analysis Insights: Each stock shows signs of bullish momentum and technical indicators, such as Golden Crosses and moving averages, suggesting potential for price appreciation despite recent volatility.
See More
