Aryzta falls on new share placing

Aryzta has confirmed that it has raised CHF 174,341,799 (€144 million) through a placing of 4.25 million new shares at a price of 41.00 per share with institutional investors.

The Zurich-based company announced plans for the placement yesterday evening.

Aryzta stock fell by the most in five months in Zurich trading today, while it was trading 6 per cent lower in Dublin this afternoon at around €35.30.

Aryzta said yesterday it was undertaking the share placing in order to broaden its shareholder base and strengthen its balance sheet.

There was mixed reaction from analysts to the announcement of the proposed placing this morning. Noting the adjusted earnings per share guidance was being maintained, Davy said the effective 5 per cent upgrade to earnings per share guidance at this stage was impressive.

"The weaker euro is a factor in this but it also suggests a trading out-turn in line with, or perhaps ahead of, expectations," the stockbroker said in a note.

Goodbody Stockbroker said it was "surprised" by the decision. "We are surprised by the decision of Aryzta to have a placing at this time, since, by our estimates, it is over the hump of its acquisition-led debt," the stockbroker said in a note.

Aryzta, which was formed following the merger of IAWS and Swiss company Hiestand, posted a 54 per cent increase in revenues to €2.85 billion for the year ended July 31st, due primarily to two major acquisitions last year.

In a trading update in November, the company said trading in the first quarter of its 2012 fiscal year represented a continuation of quarter four trends, with the company posting a 4.4 per cent rise in underlying revenue.

Announcing details of its new share placing yesterday, Aryzta said the holders of the new shares will be entitled to receive the dividend for the financial year 2011, which is scheduled to be paid on February 1st.

The share issuance will have no material impact on Aryzta's expected performance.

They said its underlying earnings per share guidance of 338 cent for the financial year ending on July 31st,  remains valid.

Additional Reporting: Bloomberg