Evonik Owners Said to Recommend Suspending IPO for Third Time

Evonik Industries AG’s main owner is recommending that the German chemicals company suspend plans for an initial public offering as the European debt crisis shakes equity markets, three people familiar with the plan said.

RAG-Stiftung, the foundation that owns Evonik together with private-capital company CVC Capital Partners Ltd is leaning toward abandoning the process for now, said the people, who declined to be identified because the decision has yet to be announced. Management will meet today to evaluate their next move. No final decision has been made, the people said.

The move would mark the third time that Evonik has tried and failed to sell shares on the stock market in what would be Germany’s biggest public listing in more than a decade. Evonik has refocused on chemicals with an emphasis on health and nutrition as it reduces holdings in real-estate and energy.

Evonik had sought to raise between 2 billion and 4 billion euros ($5 billion) in its latest attempt to sell shares in an IPO, one of the people said. Barbara Mueller, a spokeswoman for Evonik, didn’t answer calls made by Bloomberg to her office yesterday outside working hours.

The maker of additives for plastics, glass and cosmetics also shelved plans in 2008 and last year because market conditions deteriorated. CVC bought a 25 percent stake in 2008 after the first failed listing. RAG said on June 10 that investors had shown a “very high interest” in the IPO planned in Frankfurt, though market conditions raised “growing uncertainty” a process could be seen through.

RAG-Stiftung, a body charged with the winding down of Germany’s deep-shaft coal mines, had earmarked proceeds from the share sale to pay for costs related to closing the mines, which are estimated to be about 200 million euros a year from 2019. Canceling the IPO will require RAG-Stiftung to rely in large parts on dividends it gets from Evonik.

Financial Times Deutschland reported earlier today that the IPO would probably be abandoned by the majority owners, citing unidentified people familiar with the plans

To contact the reporters on this story: Sheenagh Matthews in Frankfurt at smatthews6@bloomberg.net; Zijing Wu in London at zwu17@bloomberg.net; Aaron Kirchfeld in Frankfurt at akirchfeld@bloomberg.net

To contact the editor responsible for this story: Benedikt Kammel at bkammel@bloomberg.net