Covestro Share Launch Successful
German engineering plastics producer Covestro and its parent company Bayer successfully placed 62.5 million shares of the former Bayer MaterialScience in the Prime Standard of the Frankfurt Stock Exchange on Oct. 6.
The issue was three times oversubscribed, and stock market watchers said the paper was picked up by investors based in Germany and in English-speaking countries, including the US.
After starting the first day of trading at an issue price of €24, the listing price quickly rose to finally settle above €26 – a gain of more than 12%. Toward the end of the book-building process, the proposed range had been taken back from €26.50-35.50 per share to €21.50-34.50, which analysts said boosted its prospects.
Although originally planning the launch proceeds at €2.5 billion, the Leverkusen giant, which is repositioning itself as a pure life science player, dropped its target by €1 billion to keep the new standalone company’s net indebtedness at €4 billion.
The Covestro shares are also being offered to investors in Luxembourg in addition to Frankfurt. Following the successful placement, Bayer’s stake in its former sub-group has sunk to 69%, and the German group is aiming for future gradual reductions.