* RAG trust, CVC place small stake with investors
* Sale to institutional investors precedes planned IPO
* Another 3 percent to be placed in next 2-3 weeks-source
* IPO attempt was aborted in June last year
By Matthias Inverardi and Arno Schuetze
DUESSELDORF/FRANKFURT, Feb 22 The owners of
Evonik have revived plans to take the German chemical
company public as stock markets recover, in a move which sources
close to the matter say could value the group at 14 billion
euros ($18.5 billion) or more.
The RAG trust, which owns 75 percent of Evonik, and buyout
firm CVC Capital Partners, owner of the rest, said on
Friday they had placed a small stake with institutional
investors in a prelude to an initial public offering (IPO).
"Evonik Industries AG is resuming its preparations for its
planned listing in the Prime Standard of the Frankfurt Stock
Exchange. The move is prompted by the improved capital market
environment," they said, adding they sold equal amounts in the
Documents obtained by Reuters showed a stake of almost 4
percent was sold for 550 million euros and that the first day of
trading was planned for late April.
In June last year RAG, a public-sector trust that will bear
the liabilities of Germany's wound-down coal mines, and CVC,
which came on board as a minority investor in Evonik in 2008,
scrapped plans for an IPO of 30 percent of the shares, following
previous unsuccessful attempts.
But since June, European stock markets and in turn IPO
markets have picked up amid tentative signs the euro zone's debt
crisis is easing. The FTSEurofirst 300 has gained about
17 percent since Evonik's latest IPO attempt.
A source close to one of Evonik's owners said another 3
percent stake would be placed with investors within 2-3 weeks.
Another 3 percent or more would be sold in April, but it had not
been decided whether a book-building process would be carried
out, where the price is determined by all the orders received
rather than, for example, individually agreed with investors.
In their statement, the owners described the prices paid by
institutional investors as in line with the market valuation of
European peers and as considerably higher than what they would
have achieved last year, declining to be more specific.
A spokeswoman for Evonik said investors "had decided
individually" what they paid for the shares, signalling there
was no blanket offer price.
Including debt, diversified chemical makers in Europe are
valued at 7.2 times annual earnings before interest, taxes,
depreciation and amortisation (EBITDA) on average, according to
Thomson Reuters StarMine.
Based on Evonik's guidance for 2012 adjusted EBITDA to have
matched or slightly beaten the prior year's 2.77 billion euros,
that would put a price tag of about 19 billion on Evonik equity.
But placements usually come at a discount to market trading
and sources familiar with the matter told Reuters the owners
value Evonik at 14 billion euros.
"The main reason for this approach was to have transaction
security," the source said. To make sure the flotation does not
fail again, Evonik's owners directly approached investors and
sold them shares at a certain "illiquidity discount", he added.
"Evonik's owners are leaving a couple of euros on the table
now, but are banking on achieving a higher average price in the
April placement and follow-up share sales," another person
familiar with the transaction said.
The investment banks mandated in 2012, which at the time
drew veiled criticism from Evonik's owners for promising a price
investors were not willing to pay, have so far not been part of
Two people familiar with the owners' thinking told Reuters
late on Thursday that the owners were preparing to have a total
free float of 10 percent by the end of April.
Evonik makes battery chemicals, animal feed additives,
acrylic glass and super-absorbents for diapers, competing with
BASF and DuPont, among others.