Russian tycoon bids for control of Swiss steelmaker

Sat Jun 29, 2013 4:56am EDT
 
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LUCERNE, Switzerland (Reuters) - Russian tycoon Viktor Vekselberg has launched a bid to control Swiss steelmaker Schmolz+Bickenbach (STLN.S: Quote) after he failed to win support from shareholders to raise more capital and install his preferred candidate on the company's board.

On Friday, Vekselberg's investment vehicle, Renova, agreed to pay a group of long-time shareholders about 58 million Swiss francs for a 20.46 percent stake in the Swiss firm. The group, Schmolz+Bickenbach GmbH & Co KG (S+B KG), descendents of the company's founders, retains a similar stake.

The two parties, which have been allies in fighting for a restructuring at Schmolz+Bickenbach, then agreed to pool their shares, giving them a combined stake of 40.46 percent. This forces new stakeholder Vekselberg, under Swiss law, to make an offer to buy the remaining shares in Schmolz+Bickenbach.

In a statement, Renova's subsidiary, Venetos Holding AG, said it planned to make an offer around July 12 of 2.85 Swiss francs for each Schmolz+Bickenbach share. This offer is below the closing price of 2.90 francs on Friday.

The tender offer is worth 200 million Swiss francs for the remaining 59.5 percent of Schmolz+Bickenbach that Renova and S+B KG do not already own, Renova spokesman Rolf Schatzmann told Reuters.

The value of the offer could rise to 397 million francs if the 330 million francs capital increase decided at Friday's AGM is executed while the tender offer is running. In that case, Renova would still bid for 59.5 percent of the company's shares but would then offer only 1.26 francs per share.

However, Schatzmann said the offer is just a way of gaining control of the company to force a restructuring. He said Renova hopes existing shareholders will retain their shares rather than sell them.

Schmolz+Bickenbach's board and its founding family have been at odds over the future direction of the company, with the founders believing that the firm needs to raise more capital to secure its financial strength.

Vekselberg typically seeks to gain influence over the companies he invests in by building up a substantial minority stake, as he has done previously at Swiss machinery and equipment makers Sulzer SUN.VX and Oerlikon (OERL.S: Quote).   Continued...

 
Russian businessman Viktor Vekselberg gestures during a ceremony to mark International Holocaust Remembrance Day at the Jewish Museum and Tolerance Center in Moscow January 27, 2013. REUTERS/Sergei Karpukhin