FRANKFURT, June 8 The decision to open the order
books on German chemicals firm Evonik's share sale hung in the
balance on Friday, sources said, ahead of a weekend board
meeting by its main owner and as the euro zone crisis looked set
for a new turn with Spain poised to ask for aid.
Majority owners the RAG foundation are due to
meet on Sunday, sources said, to debate a price range for the
initial public offering (IPO), which could raise as much as 5
billion euros ($6.2 billion).
They have spent two weeks marketing the sale to investors.
Setting a price range has however been hampered by reluctant
investors who await the outcome of Greek parliamentary elections
on June 17, which could decide the country's future in the euro
zone, and amid expectations Spain will seek assistance for its
A source close to the RAG foundation, which owns Evonik
along with private equity firm CVC, said views were mixed. Some
members want to cancel the IPO and others say it could go ahead
but for a smaller stake than the 30 percent originally planned.
Two financial market sources said it was likely
pre-marketing of the offering would be extended, with a final
decision on whether to proceed with the sale to be made after
the June 17 Greek elections.
"(The owners of) Evonik will reserve the right to reassess
the situation after the Greek elections," said one financial
source, adding that preparations for the offering continue and
investor feedback had been positive.
"Investors like the equity story but they are spooked by the
euro zone crisis, so Evonik will have to find a way around
that," another financial source said.
On Friday five senior EU and German officials said deputy
finance ministers from the single currency area would hold a
conference call on Saturday morning to discuss a Spanish request
for help recapitalising its banks.
When they kicked off marketing of the offering on May 25,
RAG and CVC said the first day of trading for Evonik, which
makes battery chemicals, animal feed additives, acrylic glass
and superabsorbents for diapers, was expected to be before "the
summer break," without giving further details.
But 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. It had already
been pushed back from last year.
RAG owns 75 percent of Evonik, while CVC owns 25 percent.
Europe has seen little significant IPO activity since the
middle of last year. While the IPOs of Ziggo and DKSH
found strong support in March, the jury is still out on
whether others such as Rheinmetall's auto parts unit
and German insurer Talanx will go public this year as planned.
Deutsche Bank and Goldman Sachs are joint
global coordinators and joint bookrunners for the Evonik
Bank of America Merrill Lynch, Credit Suisse
and J.P. Morgan are also acting as joint bookrunners.
A spokesman for the RAG foundation was not available for
($1 = 0.8021 euros)
(Reporting by Matthias Inverardi, Edward Taylor, Arno Schuetze,
Frank Siebelt and Ludwig Burger; Writing by Kylie MacLellan;
editing by Jason Neely)