Reuters: Private Equity: UPDATE 1-Germany's RAG threatens to pull plug on Evonik IPO

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UPDATE 1-Germany's RAG threatens to pull plug on Evonik IPO Jun 10th 2012, 15:50 Sun Jun 10, 2012 11:50am EDT (Adds RAG board sources on investor talks) FRANKFURT/DUESSELDORF, June 10 (Reuters) - The owners of German chemicals firm Evonik may pull the plug on what could have otherwise been Europe's largest initial public offering in more than a year. "The performance of financial markets since the end of May have added to the uncertainty whether enough proceeds are achievable that reflect the value of Evonik," said the RAG Foundation in a statement on Sunday. "The certainty of a flotation based on an appropriate valuation of Evonik is a prerequisite of the IPO." RAG owns 75 percent of Evonik while CVC owns 25 percent. Sources close to the matter have told Reuters that the owners hope the IPO would value the entire chemicals group at 15 billion euros, after subtracting 1 billion in net debt. According to two people in RAG's board, investors were clearly not willing to pay anything close to the 15 billion euros. Another meeting of the board is planned for June 18, a day after elections in Greece that are hotly anticipated by markets worldwide. They added that Evonik could seek to raise as much as 5 billion euros ($6.3 billion) for owners and private equity firm CVC, which would be the biggest IPO in Europe since commodities trader Glencore's $10 billion flotation in May 2011. RAG, a state-owned trust that will bear the liabilities of Germany's wound-down coal mines, had previously signalled a possible delay of the IPO due to market turmoil. (Reporting by Ludwig Burger and Matthias Inverardi; Writing by Christiaan Hetzner; Editing by Jon Loades-Carter) Link this Share this Digg this Email Reprints

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