Reuters: Private Equity: German group Evonik to launch EUR5bn IPO on Friday

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German group Evonik to launch EUR5bn IPO on Friday May 24th 2012, 18:57 By Robert Venes and Abhinav Ramnarayan Thu May 24, 2012 2:57pm EDT May 24 (IFR) - German chemicals group Evonik will launch a EUR3.5bn-4.5bn IPO on Friday, with a DAX listing that could help re-energise the moribund European market in new public offerings. The timing means the specialty chemicals maker will be taking on the full brunt of what may well be a chaotic situation in Europe when troubled Greece goes to the polls on June 17. ECM bankers say that, in a difficult market, it is easier to place jumbo deals for large companies that guarantee liquidity and profile - even in the wake of the Facebook IPO. The US$1bn-plus IPOs of Ziggo and DKSH found strong support, while others in Europe have faltered. Evonik has a potential valuation of EUR15bn-EUR20bn and an expected free-float of at least 25%. The company declined to comment. Bankers said a precise schedule would not be set out at launch, but that the market should assume a standard two weeks of pre-marketing for the new listing, followed by two weeks of bookbuilding. This would indicate publication of a price range around June 11 and pricing around June 23. Bankers involved said the expected outcome of Greek elections will become clearer each week, and that the timetable could be altered as necessary. UK accounts will also be absent for most of the week of June 4 due to two bank holidays for the Queen's Jubilee. Last week, German vehicle components maker Kolbenschmidt Pierburg put its IPO on hold after pre-marketing, prompting Wilhelm Bonse-Geuking, the head of RAG Foundation and Evonik's major shareholder, to tell Reuters on Monday that the timetable for the float may be reviewed. One head of European ECM working on the deal said investors are sitting on cash ready to buy the right stock. Another banker on the deal declared Evonik a "must have" -- but as such it is a unique situation and would not single-handedly symbolise a re-opening of the European IPO market. In addition, other issuers looking to see how the deal and Greek elections fare would not have a great deal of time to launch and price before the summer. RAG Foundation, a state-owned body, holds a 75% stake in Evonik, with private equity firm CVC Capital Partners owning the balance. Contrary to the usual expectations of hard-nosed private equity houses, RAG is said to be the more price sensitive of the two. Deutsche Bank and Goldman Sachs are joint global co-ordinators and bookrunners. Bank of America Merrill Lynch, Credit Suisse and JP Morgan are also joint bookrunners. (Reporting by Robert Venes and Abhinav Ramnarayan; Editing by Marc Carnegie) Link this Share this Digg this Email Reprints

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