Mori Seiki to Raise Stake in Gildemeister

Accoridng to a report on Reuters, Gildemeister unveiled the first of two planned capital increases, under which Japan's Mori Seiki will raise its stake in Gildemeister, the No. 1 maker of cutting machine tools worldwide.

In a first step, Gildemeister will raise its share capital by about 10% by issuing new shares that will be sold exclusively to Mori Seiki, as announced Tuesday in a press statement by Gildemeister.

Mori Seiki will pay 18.22 euros per share in cash for the new shares, which Gildemeister says was a 20% premium to the volume weighted average share price of the last 10 trading days. The shares will have full dividend rights for 2010.

Gildemeister says it expected to raise about 83 million euros ($116 million) from the capital increase.

Mori Seiki and Gildemeister have been working together in parts procurement and other areas and have backed their cooperation with a cross-shareholding. Mori Seiki already holds a stake of around 5% in Gildemeister.

Gildemeister also plans a second capital increase from authorised capital, to follow quickly on the heels of the first, in which Mori Seiki will also participate.

"The second capital increase would be expected to amount to 20% of the share capital of the company at that time," Gildemeister states, adding that a price for the shares had yet to be set.