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MarketScreener Homepage  >  Equities  >  Xetra  >  Covestro    1COV   DE0006062144

COVESTRO (1COV)
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Covestro Shares Nosedive After Bayer Reduces Stake

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03/01/2017 | 09:44am CEST

By Sarah Sloat

Shares in Covestro AG tumbled early Wednesday after Bayer AG placed a Covestro stake worth almost 1.5 billion euros ($1.59 billion) ahead of its planned acquisition of Monsanto Co.

Bayer sold 22 million shares at EUR66.50 to institutional investors and retains a majority stake of 53.3% in the plastics company, it said. Prior to the placement it held 64.2% in Covestro, listed in Germany's MDAX index of mid-cap companies.

Covestro shares dropped 8.5% at the open to EUR65.00, compared with Tuesday's EUR71.07 close. Bayer gained 1.2% to EUR105.00 within the first minutes of trading.

Bayer is in the midst of financing its $57 billion acquisition of U.S. seed company Monsanto, which it intends to pay for in cash. Last week, Chief Financial Officer Johannes Dietsch told The Wall Street Journal that Bayer would stick to its plan to raise $19 billion in equity before moving on to a rights and bond issue.

Although the Covestro placement will help Bayer finance Monsanto, the proceeds are "a drop in the bucket," a trader said.

As previously announced, Bayer said it intends to sell off its Covestro holding entirely in the coming years. It took the opportunity to place the share block at this time because of favorable market conditions and the Covestro share's appreciation since its listing, Bayer said. Compared with Tuesday's closing price, Covestro's share price almost tripled since its October 2015 listing at EUR24 per share.

Bayer spun off Covestro, formerly Bayer Material Science, in an initial public offering in 2015. Covestro employed 15,600 people in 2016 and had sales of about EUR11.9 billion.

-Write to Sarah Sloat at sarah.sloat@wsj.com

Stocks mentioned in the article
ChangeLast1st jan.
BAYER 2.13% 77.68 Delayed Quote.-25.65%
COVESTRO 0.74% 62.24 Delayed Quote.-28.19%
MDAX -0.46% 23760.27 Delayed Quote.-8.89%
MONSANTO 0.00%-End-of-day quote.9.57%
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Financials (€)
Sales 2018 14 710 M
EBIT 2018 2 909 M
Net income 2018 2 075 M
Debt 2018 444 M
Yield 2018 4,16%
P/E ratio 2018 5,82
P/E ratio 2019 6,67
EV / Sales 2018 0,88x
EV / Sales 2019 0,81x
Capitalization 12 510 M
Chart COVESTRO
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Technical analysis trends COVESTRO
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Income Statement Evolution
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Mean consensus OUTPERFORM
Number of Analysts 25
Average target price 100 €
Spread / Average Target 63%
EPS Revisions
Managers
NameTitle
Markus Steilemann Chief Executive Officer
Richard Pott Chairman-Supervisory Board
Thomas Toepfer Chief Financial Officer
Klaus Schäfer Chief Technology Officer
Petra Kronen Vice Chairman-Supervisory Board
Sector and Competitors
1st jan.Capitalization (M$)
COVESTRO-28.19%14 460
FORMOSA CHEMICALS & FIBRE CORPORATION--.--%22 479
FORMOSA PLASTICS CORPORATION--.--%21 839
LG CHEM LTD--.--%19 711
LOTTE CHEMICAL CORP--.--%8 160
HENGYI PETROCHEMICAL CO LTD--.--%5 234