Dutch construction group offers 97 million new shares at 38% discount

Royal Bam’s heavily discounted rights offering sent its share price tumbling today.

The slide followed the announcement by the Dutch construction group that its much anticipated rights offering of 97 million new shares will be at €2.58 (£2.14) per share, a 38% discount.

The steep discount has unnerved some analysts. In a note, SNS Securities analyst Edwin de Jong said: “We clearly anticipated a smaller discount.” He added: “We interpret this news as negative.”

The group’s shares were down more than 2% in late afternoon trading on the Amsterdam stock market today.

The offering will raise €249m (£207m) and is fully underwritten by ING, Rabobank and Royal Bank of Scotland.

Last month Royal Bam revealed it wanted to raise €250m in a rights offering in order to pump money in its public-private projects.

Analysts said Royal Bam is in need of additional capital, while its real estate unit is under pressure due to the continuing financial crisis.

Earlier this month Royal Bam posted an unexpected 19% rise in first-quarter net profit as profitability at most of its units improved, despite a 13% fall in turnover.

The Bunnik-based company said net profit for the first three months of 2010 rose to € 9.9m against €8.3m for the same period a year earlier.

Turnover fell to €1.5bn from €1.7bn.