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.

To contact the reporter on this story: Fiona Hostettler in Fh at fhostettler@bloomberg.net

To contact the editor responsible for this story: Matthias Wabl at mwabl@bloomberg.net

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