Leverkusen, Germany — The share price of Covestro rose by 10% soon after listing on the Frankfurt Stock Exchange this morning.
Shares were priced at €24 (£17.74) in the initial public offering (IPO) of Covestro – the former Bayer MaterialScience – and the price increased to €26.50 (£19.58) in early trading on 6 October.
On 1 October, Bayer reduced its original pricing range for Covestro from €26.5-€35.5/share (£19.58-£26.23) to between €21.5 and €24.5/share (£15.89-£18.11) due to financial market uncertainties.
Covestro said in a news release today: “The listing was preceded by a bookbuilding process lasting for two weeks – in an increasingly deteriorating and volatile capital market environment.”
The company plans to use the gross proceeds of €1.5bn (£1.11bn) from the IPO to repay its debt to Bayer group which will allow it to achieve the targeted investment-grade rating, it said.
“We are proud to now be a listed company,” said Covestro chief executive Patrick Thomas. “It puts us in an even better position than before, enabling us to build on our strengths in the global competitive arena. We intend to share our business success with our investors and will therefore pay them a dividend from the start.”
A polycarbonate bull at the Frankfurt Stock Exchange demonstrated Covestro’s optimism about rising share prices, and the trading floor was decorated with thousands of coloured PC beakers “to reflect Covestro’s colourful new image”, the company said.
Covestro had sales of €11.7bn (£8.65bn) in 2014 from polycarbonates, polyurethanes and other polymer products.
Crain News Service