Evonik seeks shareholder permission to issue stock for M&A deals
FRANKFURT, April 7
FRANKFURT, April 7 (Reuters) - Evonik will ask shareholders' permission to issue up to one quarter of its current equity capital in new shares over the next five years, as the German chemicals maker scans the market for takeover targets.
Chief Executive Klaus Engel said last month that larger takeovers were an option for the maker of feed additives, clear acrylic sheet and high-tech plastics.
Based on the current share price, a 25 percent stake would be worth 3.3 billion euros ($45.2 billion) but a capital increase is typically priced at a discount to the trading price.
Since Evonik was debt free at the end of last year, it would have considerable leeway to take out additional bonds or loans for any merger deal.
If given the green light by investors, the permission to raise capital would be valid until May 2019, the invitation to shareholders for the May 20 annual general meeting showed.
Any capital increase would require the consent of the supervisory board.
The new shares could be issued against cash but could also be used as currency to be offered to shareholders of any merger partner, the invitation said.
Evonik is 68 percent-owned by the RAG foundation, a public sector trust that will finance the cost of maintaining Germany's abandoned coal mines. Buyout firm CVC holds an 18 percent stake.