Evonik pulls float until markets recover enough to raise its price

City A.M. Reporter
THE owners of German chemical company Evonik yesterday scrapped plans for what could have been Europe’s biggest initial public offering (IPO) in more than a year, saying it would only resume efforts for a listing if markets recover.

“Many big investors indicated their willingness to invest in Evonik in talks last week, but due to the high level of uncertainty in the markets, especially over the further development of the Eurozone, the price that could be reached is far from a sufficient valuation of Evonik,” the RAG Foundation said.

RAG owns 75 per cent of Evonik, which makes battery chemicals, animal feed additives, acrylic glass and super-absorbents for diapers. Private equity firm CVC holds the remaining 25 per cent.

“The banks promised too much. Expectations were created that were too high,” said one investment banker involved in the IPO.

Deutsche Bank and Goldman Sachs led preparations for the IPO, in which RAG and CVC planned to float about 30 per cent of Evonik.