ThyssenKrupp AG (TKA) rose the most in two weeks in Frankfurt as Credit Suisse Group AG said it expects the disposal of its Americas unit in a month, increased capital and an industry recovery to revive Germany’s largest steelmaker.
The Essen, Germany-based steelmaker climbed as much as 3.9 percent, the most since June 14. The Americas sale within about a month plus a capital increase should see the stock “rally materially,” Credit Suisse analyst Michael Shillaker wrote.
Last month, ThyssenKrupp Chief Executive Officer Heinrich Hiesinger said he wouldn’t rule out a capital increase “for the next six to nine months.” ThyssenKrupp is selling its Steel Americas operations to cut business units to five from eight, while expanding non-steel operations. Waning demand from the automakers and builders has shrunk prices and margins.
ThyssenKrupp rose 2.2 percent to 14.95 euros by 12:25 p.m. in Frankfurt, the second-biggest gainer on the key DAX index.
“The end game should be approaching soon” as sales of the units, speculation over rights issues and cartel probes come to a close, allowing investors to focus on the “cyclical earnings recovery ahead,” Credit Suisse said today in a research note.
ThyssenKrupp is studying selling its Steel Europe unit or merging it with another company, Sueddeutsche Zeitung reported today, citing people familiar with the matter it didn’t name. The company declined to comment.
“We have a problem in America. We don’t have a problem with steel,” Hiesinger said in February, calling Steel Europe an “affair of the heart.” The company is planning to save 500 million euros ($653 million) by reorganizing European steel and cutting more than 2,000 jobs to reduce capacity.
“I assume that ThyssenKrupp separates itself from Steel Europe sooner or later,” Ingo Schmidt, an analyst at Hamburger Sparkasse AG, said by phone from Hamburg.
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