Gerdau Ameristeel Completes US$1.55B Offering of Common Shares

On November 7, 2007, Gerdau Ameristeel Corporation completed a public offering of 126.5 million common shares, including the full exercise of the overallotment option. Gerdau S.A., the majority shareholder of Gerdau Ameristeel, purchased approximately 84.1 million of the common shares (including approximately 10.9 million common shares issued to Gerdau S.A. concurrently with the closing of the overallotment option). Approximately 42.4 million common shares (including approximately 5.5 million common shares issued to the underwriters pursuant to the overallotment option) were purchased by the underwriting syndicate for distribution to the public. The common shares were sold in the United States and Canada at a price of US$12.25 per share for total gross proceeds of approximately US$1.55 billion. The net proceeds of the offering were used to repay a portion of the loans incurred by Gerdau Ameristeel for its acquisition of Chaparral Steel Company, which closed on September 14, 2007.

J.P. Morgan Securities Inc., CIBC World Markets Corp., ABN AMRO Rothschild LLC and HSBC Securities (USA) Inc. were joint book-running managers of the offering, and Banc of America Securities LLC and BMO Capital Markets acted as co-managers of the offering.
Gerdau Ameristeel is the second-largest minimill steel producer in North America, with a network of 19 minimills (including one 50 per cent-owned joint venture minimill), 19 scrap recycling facilities and 62 downstream operations serving customers throughout the United States and Canada.

Gerdau Ameristeel was represented in-house by Vice President, General Counsel and Corporate Secretary Robert E. Lewis, and by Torys LLP on the Canadian and US aspects of the offering with a team that was led by Karrin Powys-Lybbe and included Andrew Beck, Rima Ramchandani, Sue-Anne Fox, Michael Arnot and Sandra Iacobelli (corporate/securities); John Tobin, Peter Keenan, Gregg Larson and Grace Pereira (tax); and Dennis Mahony and Michael Fortier (environmental), with assistance from Jeff Gracer (Sive, Paget & Riesel, P.C., US environmental).

The underwriters were represented in the United States by a team from Skadden, Arps, Slate, Meagher & Flom LLP, which included Riccardo Leofanti, Eric Spindel, Michele Discepola and David Beeston (corporate/securities); John Amodeo (environmental); Kai Kramer and Eric Sensenbrenner (tax) and in Canada by Blake, Cassels & Graydon LLP with a team that included Chris Hewat, Brendan Reay, John Wilkin, Ali Naushahi, Ryan Atkinson and Rory Engels (corporate/securities); Robert Fishlock and Michael Mercer (environmental); and Ron Richler (tax).