Filed by Companhia Siderurgica Nacional
under its name translated into English: National Steel Company
pursuant to Rule 425 under the Securities Act of 1933
and deemed filed pursuant to Rule 14a-12
under the Securities Exchange Act of 1934
Subject Company: Wheeling-Pittsburgh Corporation
Commission File No.: 000-50300
On November 6, 2006, Companhia Siderurgica Nacional issued the
following joint press release with Wheeling-Pittsburgh Corporation concerning
the proposed strategic alliance between Companhia Siderurgica Nacional and
Wheeling-Pittsburgh Corporation. The following press release contains forward
looking statements as discussed more fully below.
RELEASE DATE: NOVEMBER 6, 2006
FOR IMMEDIATE RELEASE
---------------------
CSN ENHANCES EXISTING PROPOSAL TO WHEELING-PITTSBURGH
SHAREHOLDERS; WHEELING-PITTSBURGH BOARD ENDORSES ENHANCEMENT
AS BEST CURRENT ALTERNATIVE
WHEELING, WV and SAO PAOLO, BRAZIL, November 6, 2006 -Companhia Siderurgica
Nacional (CSN) (NYSE: SID) and Wheeling-Pittsburgh Corporation (NASDAQ: WPSC)
today announced that CSN has offered Wheeling-Pittsburgh an enhancement to its
existing agreement with Wheeling-Pittsburgh. The board of Wheeling Pittsburgh
Corporation has received and endorsed the new proposal as the best alternative
currently available to the Company and its shareholders.
Under the Agreement and Plan of Merger previously announced on October 24, 2006,
the parties agreed to a merger of Wheeling-Pittsburgh with a subsidiary of CSN,
as a result of which the Wheeling-Pittsburgh shareholders would receive 50.5% of
the combined entity and CSN would own the remaining 49.5%. The combined entity
would be known as Wheeling-Pittsburgh Corporation. CSN also agreed to contribute
$225 million in cash through the issuance by the combined company of a
convertible debt security.
Under the enhanced proposal, for each share of Wheeling-Pittsburgh Corporation,
shareholders will have the choice of electing to receive either i) a share of
common stock in the new combined company ("A Share"); ii) a Depositary Share
that requires CSN to pay $30 per share in cash four years after the merger ("B
Share"); or iii) a combination of A and B Shares. Each B share will represent
the same class of common stock as the A Share that is deposited with a
depositary and will be subject to a mandatory purchase by CSN for $30 per share
on the 4th anniversary of the merger. The total number of B Shares will be
limited to 50% of the total of A and B Shares issued in the merger. The B shares
will be listed for trading on the NASDAQ. CSN and the Company are in discussions
to finalize the enhancement, subject to an amendment of the existing definitive
agreements.
James G. Bradley, Chairman and Chief Executive Officer of Wheeling-Pittsburgh
stated "The existing proposal represented the best strategic option for
Wheeling-Pittsburgh shareholders at the time, continues to provide our
shareholders an opportunity to realize significantly greater value, and
positions Wheeling-Pittsburgh for future success. This enhanced proposal
improves upon the previous proposal by providing the benefit of choice to
shareholders and expressing the confidence that CSN has in this combination.
Both CSN and the Company believe that the combined company will create
significantly enhanced value going forward, and this alternative provides
shareholders an opportunity to cash in on some of that value today at a
significant premium to the current stock price if they so choose. Since this
Company emerged from bankruptcy just over three years ago, our employees have
worked hard and with full commitment to making Wheeling-Pittsburgh a success.
CSN's enhanced proposal validates the extent of our employees' contributions and
the great strides this Company has made in a relatively short period of time."
Marcos Lutz, Managing Director for Infrastructure and Energy, CSN, said, "We
firmly believe in the value creation underlying the combination of our companies
and are confident that significant synergies will be achieved. We also wanted to
be responsive to what we have heard from shareholders and present this revised
proposal which essentially offers them an attractive cash alternative. A number
of financial institutions have volunteered to monetize the B Shares for
shareholders, thereby establishing a market and price for these B Shares
immediately."
Bradley concluded, "The paramount focus for our Board is creating shareholder
value, and we are committed in pursuing the best transaction available to our
shareholders. In addition to continuing to be open to bona fide third party
offers, we continue to be in discussion with CSN to improve its current offer.
In such effort, we are in active discussions with CSN in which CSN would allow
existing Wheeling-Pitt shareholders to participate in the economic upside of the
shares underlying the $225 million Convertible Debt. While this aspect of
discussions are in preliminary stages and many details such as tax and legal
structuring need to be addressed, this is another indication of our commitment
to create additional value for our shareholders and CSN's willingness to share
the potential upside benefits of this combination."
Under the terms of the agreement already announced, CSN will contribute its
modern steel processing facility in Terre Haute, Indiana with current annual
pickled and oiled, cold rolled and galvanized products of 1 million tons,
provide Wheeling-Pittsburgh exclusive U.S. and Canadian distribution rights for
CSN's flat-rolled steel products and commit to a ten-year slab supply agreement,
which will provide a long-term, guaranteed supply of high-quality slabs on
favorable payment terms.
CSN will also contribute $225 million in cash through the issuance by the
combined company of a convertible debt security that, with the consent of the
United Steelworkers, can be converted into equity in three years. Of the $225
million, approximately $150 million will be used for transformative capital
improvements - $75 million to build a new energy-efficient furnace that would
increase Wheeling-Pittsburgh's hot strip mill capacity to 4 million tons, and
the balance to add a second galvanizing line at Terre Haute. The remaining $75
million will be used to enhance the combined company's liquidity position.
The Company and CSN expect to file a preliminary joint proxy statement and
prospectus regarding the CSN transaction with the SEC as soon as possible.
The Company's Annual Meeting of Shareholders to elect its Board of Directors is
scheduled for November 17, 2006 at the White Palace in Wheeling, WV. In
addition, the Company expects to hold a Special Meeting of Stockholders in
January 2007 to vote on the proposed transaction with CSN.
* * *
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Wheeling-Pittsburgh Corporation, together with the other participants as
indicated below, intends to file with the Securities and Exchange Commission
(the "SEC") a proxy statement and accompanying proxy card to be used to solicit
votes for the election of its slate of director nominees at the 2006 annual
meeting of stockholders of Wheeling-Pittsburgh Corporation and subsequently at a
special meeting of stockholders to seek approval of the Company's proposed
strategic alliance with CSN. The Company urges its shareholders to read the
proxy statement in its entirety when it becomes available because it will
contain important information, including information on the participants and
their interests in Wheeling-Pittsburgh Corporation. When filed, the proxy
statement will be available at no charge at the SEC's website at
http://www.sec.gov. The participants in this proxy solicitation are
Wheeling-Pittsburgh Corporation and the director nominees included in the proxy
statement to be filed with the SEC. Additional information regarding potential
participants in the proxy solicitation and their respective interests may be
obtained by reading the proxy statement regarding the proposed strategic
alliance if and when it becomes available.
Forward-Looking Statements Cautionary Language
----------------------------------------------
The information contained in this news release and the investor presentation,
other than historical information, consists of forward-looking statements within
the meaning of Section 27A of the Securities Act and Section 21E of the
Securities Exchange Act. In particular, statements containing estimates or
projections of future operating or financial performance are not historical
facts, and only represent a belief based on various assumptions, all of which
are inherently uncertain. Forward-looking statements reflect the current views
of management and are subject to a number of risks and uncertainties that could
cause actual results to differ materially from those described in such
statements. These risks and uncertainties include, among others, factors
relating to (1) the risk that the businesses of CSN Holdings Corp. and
Wheeling-Pittsburgh will not be integrated successfully or such integration may
be more difficult, time-consuming or costly than expected; (2) the ability of
CSN, CSN Holdings Corp. and Wheeling-Pittsburgh to realize the expected benefits
from the proposed strategic alliance, including expected operating efficiencies,
synergies, cost savings and increased productivity, and the timing of
realization of any such expected benefits; (3) lower than expected operating
results for Wheeling-Pittsburgh for the remainder of 2006 or for the strategic
alliance; (4) the risk of unexpected consequences resulting from the strategic
alliance; (5) the risk of labor disputes, including as a result of the proposed
strategic alliance or the failure to reach a satisfactory collective bargaining
with the production employees; (6) the ability of the strategic alliance to
operate successfully within a highly cyclical industry; (7) the extent and
timing of the entry of additional competition in the markets in which the
strategic alliance will operate; (8) the risk of decreasing prices for the
strategic alliance's products; (9) the risk of significant supply shortages and
increases in the cost of raw materials, especially carbon slab supply, and the
impact of rising natural gas prices; (10) rising worldwide transportation costs
due to historically high and volatile oil prices; (11) the ability of the
strategic alliance to complete, and the cost and timing of, capital improvement
projects, including upgrade and expansion of Wheeling-Pittsburgh's hot strip
mill and construction of an additional galvanizing line; (12) increased
competition from substitute materials, such as aluminum; (13) changes in
environmental and other laws and regulations to which the strategic alliance are
subject; (14) adverse changes in interest rates and other financial market
conditions; (15) failure of the convertible financing proposed to be provided by
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CSN to be converted to equity; (16) changes in United States trade policy and
governmental actions with respect to imports, particularly with respect to
restrictions or tariffs on the importation of carbons slabs; and (17) political,
legal and economic conditions and developments in the United States and in
foreign countries in which the strategic alliance will operate. There is no
guarantee that the expected events, trends or results will actually occur. The
statements are based on many assumptions and factors, and any changes in such
assumptions or factors could cause actual results to differ materially from
current expectations. CSN, CSN Holdings Corp. and Wheeling-Pittsburgh assume no
duty to update forward-looking statements. Reference is made to a more complete
discussion of forward-looking statements and applicable risks contained in CSN's
and Wheeling-Pittsburgh's filings with the SEC.
ABOUT WHEELING-PITTSBURGH
Wheeling-Pittsburgh was organized as a Delaware corporation on June 27, 1920
under the name Wheeling Steel Corporation. Its headquarters is located in
Wheeling, WV, with major production facilities in the Upper Ohio and Monongahela
valleys. Wheeling-Pittsburgh is a holding company that, together with its
several subsidiaries and joint ventures, produces steel and steel products using
both integrated and electric arc furnace technology. The Company has slab making
production capacity of 2.8 million short tons and hot rolling capacity of 3.4
million short tons. Approximately 65 percent of its sales are comprised of high
value-added products.
ABOUT COMPANHIA SIDERURGICA NACIONAL
CSN is a leading global steel producer with operations in Latin America, North
America, and Europe. CSN is a fully integrated steel producer, the largest
coated steel producer in Brazil, with current capacity of 21.5 million tons of
iron ore, 5.6 million tons of crude steel, 5.1 million tons of rolled products
and 2.9 million tons of coated steel capacity.
CSN's process is based on the integrated steelworks concept that uses the
Company's own sources of iron ore. Besides the iron ore mine, CSN controls
logistics assets -- ports and railways -- that enable an extremely cost
efficient and reliable loading and unloading of slabs and ore for deep sea
vessels. This integrated steelworks concept allows CSN to be one of the most
cost competitive steel producers in the world.
CSN has had operations in the United States since 2001 through its wholly owned
subsidiary Companhia Siderurgica Nacional, LLC (formerly known as Heartland
Steel) located at Terre Haute, Indiana. Companhia Siderurgica Nacional LLC has
an annual production capacity of 1 million tons of pickled and oiled, cold
rolled and galvanized products. CSN shares are traded on the Sao Paolo (BOVESPA)
and New York (NYSE) stock exchanges.
***
CONTACTS:
FOR WHEELING-PITTSBURGH CORPORATION:
Dennis Halpin (Investors)
304-234-2421
Jim Kosowski (Media)
304-234-2440
FOR CSN:
Jose Marcos Treiger (Investors)
+55-11-3049-7511
Jeremy Fielding or Laura Walters, Kekst and Company (U.S. Media)
+1-212-521-4800
# # #
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The information contained in the foregoing press release, other than historical
information, consists of forward-looking statements within the meaning of
Section 27A of the Securities Act and Section 21E of the Securities Exchange
Act. In particular, statements containing estimates or projections of future
operating or financial performance are not historical facts, and only represent
a belief based on various assumptions, all of which are inherently uncertain.
Forward-looking statements reflect the current views of management and are
subject to a number of risks and uncertainties that could cause actual results
to differ materially from those described in such statements. These risks and
uncertainties include, among others, factors relating to (1) the risk that the
businesses of CSN Holdings Corp. and Wheeling-Pittsburgh will not be integrated
successfully or such integration may be more difficult, time-consuming or costly
than expected; (2) the ability of CSN, CSN Holdings and Wheeling-Pittsburgh to
realize the expected benefits from the proposed strategic alliance, including
expected operating efficiencies, synergies, cost savings and increased
productivity, and the timing of realization of any such expected benefits; (3)
lower than expected operating results for Wheeling-Pittsburgh for the remainder
of 2006 or for the strategic alliance; (4) the risk of unexpected consequences
resulting from the strategic alliance; (5) the risk of labor disputes, including
as a result of the proposed strategic alliance or the failure to reach a
satisfactory collective bargaining with the production employees; (6) the
ability of the strategic alliance to operate successfully within a highly
cyclical industry; (7) the extent and timing of the entry of additional
competition in the markets in which the strategic alliance will operate; (8) the
risk of decreasing prices for the strategic alliance's products; (9) the risk of
significant supply shortages and increases in the cost of raw materials,
especially carbon slab supply, and the impact of rising natural gas prices; (10)
rising worldwide transportation costs due to historically high and volatile oil
prices; (11) the ability of the strategic alliance to complete, and the cost and
timing of, capital improvement projects, including upgrade and expansion of
Wheeling-Pittsburgh's hot strip mill and construction of an additional
galvanizing line; (12) increased competition from substitute materials, such as
aluminum; (13) changes in environmental and other laws and regulations to which
the strategic alliance are subject; (14) adverse changes in interest rates and
other financial market conditions; (15) failure of the convertible financing
proposed to be provided by CSN to be converted to equity; (16) changes in United
States trade policy and governmental actions with respect to imports,
particularly with respect to restrictions or tariffs on the importation of
carbons slabs; and (17) political, legal and economic conditions and
developments in the United States and in foreign countries in which the
strategic alliance will operate. There is no guarantee that the expected events,
trends or results will actually occur. The statements are based on many
assumptions and factors, and any changes in such assumptions or factors could
cause actual results to differ materially from current expectations. CSN, CSN
Holdings and Wheeling-Pittsburgh assume no duty to update forward-looking
statements. Reference is made to a more complete discussion of forward-looking
statements and applicable risks contained in CSN's and Wheeling-Pittsburgh's
filings with the SEC.
The foregoing shall not constitute an offer of any securities for sale. If and
when definitive documentation for the proposed strategic alliance is completed,
the proposed strategic alliance will be submitted to Wheeling-Pittsburgh
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Corporation stockholders for their consideration. CSN Holdings will file a
registration statement with the SEC, containing a preliminary proxy statement of
Wheeling-Pittsburgh Corporation and a preliminary prospectus of CSN Holdings and
other relevant documents concerning the proposed strategic alliance.
Stockholders of Wheeling-Pittsburgh are urged to read the registration statement
and the definitive proxy statement/prospectus, and any other relevant documents
filed with the SEC, if and when they become available, as well as any amendments
or supplements to those documents, because they will contain important
information. You will be able to obtain a free copy of the proxy
statement/prospectus, as well as other filings containing information about CSN,
CSN Holdings and Wheeling-Pittsburgh, at the SEC's website at www.sec.gov.
CSN and CSN Holdings and their respective directors, authorized persons,
executive officers and other employees may be deemed to be participants in the
solicitation of proxies from the stockholders of Wheeling-Pittsburgh in
connection with the proposed strategic alliance. Information about the directors
and executive officers of CSN is set forth in CSN's Annual Report on Form 20-F
for the 2005 fiscal year, as filed on July 3, 2006. CSN and its directors,
authorized persons and executive officers do not own any shares of WPC.
Additional information regarding the participants in the proxy solicitation and
their respective interests may be obtained by reading the proxy
statement/prospectus regarding the proposed strategic alliance if and when it
becomes available.
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