Pelikan Plans Not Welcome in Market

Shares of German-based stationery manufacturer Pelikan International Corp. dropped 11.6% after the announcement that it plans to inject its key units and selected assets into its listed subsidiary in Germany. The drop in share value indicated the move was not well received in the market. Pelikan also disclosed its plans to launch a series of corporate exercises to raise 113.5 million euros ($157.5 million USD).

According to Pelikan said it plans to inject its key assets within the company and its 96.45% owned Swiss unit, Pelikan Holding AG, into Herlitz AG for 266 million euros ($369.1 million USD). In exchange, Pelikan International will received 266 million new bearer shares of Herlitz, valued at one euro each.

Market observers say enthusiasm was lacking over the latest development in Pelikan. An analyst explained, “The corporate exercise announced by Pelikan is somewhat neutral to the company’s shares. What investors prefer to see is a solid turnaround by the company, which has been (booking losses) in the last three years. In that sense, the next few quarterly results will be crucial for Pelikan to build investor confidence.”

One broker noted that Pelikan’s share price has run up since May. “We believe some investors would reckon it is time to take profit now,” he surmised.

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