Schmolz Declines on Chairman’s Takeover Comments: Zurich MoverPatrick Winters
Schmolz + Bickenbach AG fell the most in more than two months after the steel-maker’s chairman, Hans-Peter Zehnder, told SonntagsZeitung he has no information on possible takeover attempts by financial investors.
Schmolz declined as much as 9.2 percent, the biggest intraday fall since Nov. 2, and traded 7.3 percent lower at 2.93 Swiss francs at 11:03 a.m. in Zurich. That tapered gains last week after Handelsblatt reported that Schmolz may be sold in a transaction valued at as much as 500 million euros ($652 million).
“It’s a combination of the chairman not knowing, plus investors realizing that a takeover would be hugely dilutive to the minority shareholders in the end,” Patrick Rafaisz, an analyst at Bank Vontobel AG in Zurich, said by telephone. “If anybody assumes the 43 percent stake from the family owners, it would trigger an early redemption of Schmolz’s 258 million euros of bonds which would require a capital increase, we believe,” he said.
Schmolz sold the 9.875 percent, seven-year euro-notes in May as slowing demand for steel in Europe pressured the company’s finances. German steel executive Johannes Nonn, who joins Schmolz from Salzgitter AG, will lead the company as Chief Executive Officer from Feb. 1, replacing Benedikt Niemeyer, who was fired in June.