Shares of loss-making Dutch builder Heijmans jumped more than 30 percent Tuesday following a sharply discounted rights issue.
"If the discount is high, people want it," one trader told Reuters.
The ex-rights stock traded at a large discount to the company’s buy shares, the analyst told Reuters.
Heijmans offered existing shareholders six new shares for each one held in a move designed to reduce the firm’s growing debt mountain. The construction company has been severely hit by the recession and housing downturn.
The rights issue was priced at 0.70 euros on Monday giving a 39.8 percent discount to the theoretical ex-rights price of 1.16 euros, the analyst told Reuters.
Shares were 1.5 euros in Tuesday trading, more than double the issue price. Meanwhile, the Dutch AEX index fell 0.4 percent.
Heijmans aimed to raise 101 million euros ($141.4 million) from the offering announced in April, which it priced at 0.70 euro per new share.
- Reuters contributed to this report.