Investors call for a discount to salvage Evonik attempt to float

City A.M. Reporter
PROSPECTS for Evonik’s second IPO attempt dimmed yesterday as investors made it clear that proposed valuations for the German speciality chemical company were too high, saying only a big discount to listed peers might do the trick.

“The market right now is not willing to pay for projected long-term earnings,” said one institutional investor, who described Evonik as “a super company, a gold mine”, jittery markets notwithstanding.

“The market wants an extreme discount and if that discount is not there, no one will take the risk,” said the investor, adding market volatility required an IPO discount of more than 20 per cent on the multiples of established groups.

Evonik’s owners – German state-controlled trust RAG and buyout firm CVC – said on Sunday Evonik was increasingly unlikely to fetch an appropriate price if it listed soon as initially planned.