The big move by Bayer to spin off its Bayer MaterialScience division, and rename this group Covestro raised a lot of eyebrows. The new Covestro group was to be an independent and separate company. Therefor, the immediate thought was a possible IPO.
This ended up being a good assessment. In a posting today by Plastic News, they reveal:
“Covestro, the former Bayer MaterialScience business spun off last month, has revealed details of its long-awaited initial public offering (IPO) which aims to raise around 2.5 billion euros ($2.8 billion).
Shares in Covestro, based in Leverkusen, Germany, will be priced between 26.5 euros ($29.70) and 35.5 euros ($39.80) and the stock will be listed on the Frankfurt and Luxembourg exchanges.
Retail investors will be able to bid for shares until Oct. 1, Covestro said in a Sept. 18 news release.
There will also be a number of private placements of shares in Germany, Luxembourg and other countries.
Covestro said if the share price ends up being in the upper range it will sell 70.4 million shares; a mid-range price will see 82.4 million shares sold, and if the price is at the bottom end of the scale some 94.3 million shares will be sold.
Following the IPO, Bayer will hold around 60 percent of the remaining shares in Covestro valuing it at around 7 billion euros ($7.8 billion).
Covestro said after the public offering it would use the proceeds to repay debt to Bayer and expected net debt to be around 4 billion euros ($4.5 billion), including pension liabilities.
Internal calculations put pension liabilities at around 1.45 billion euros ($1.6 billion) for the 14,122 employees in the MaterialScience business in 2014.
Covestro said it had a target for net debt of 2.5 to 3 times earnings before interest, tax, depreciation and amortization (EBITDA) for the 2015 financial year.”
This should not change the current products supplied by Bayer MaterialScience, the old Plastics Division of Bayer. One of the best known products is produced by the Sheffield Division of Bayer (now Covestro), called Makrolon, a high clarity Polycarbonate Sheet material that is considered unbreakable, and has better clarity than glass.
Watch for more news about Covestro and Bayer here.