Schmolz Advances as Vekselberg Proposal Rejected: Zurich Mover

Schmolz & Bickenbach AG (STLN) rose after its board rejected a proposal for a 434 million franc ($458 million) capital increase and proposed a smaller share sale instead.

The steelmaker gained as much as 4.3 percent to, and was 1.7 percent higher at 3.06 francs centimes by 12:12 p.m. in Zurich, giving the Emmenbruecke, Switzerland-based company a market value of about 364 million francs.

Schmolz’s board proposed a capital increase of 330 million francs, and rejected a proposal by its Dusseldorf, Germany-based main shareholder, Schmolz & Bickenbach GmbH & Co. KG and Russian billionaire Viktor Vekselberg’s Renova Group, the company said today in an e-mailed statement.

“The 330 million francs is markedly smaller” than the amount proposed by the two shareholders, and is “to be favored,” Vontobel analyst Patrick Rafaisz, who has a hold rating on the stock, said in a note to customers. “The company is on track to resolve its balance sheet issues.”

The higher capital-increase proposal “is not necessary from the operational point of view” and would “financially disadvantage existing shareholders to an unnecessary extent,” Schmolz’s board said in the statement.

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