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4-Traders 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 [email protected]

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Financials (€)
Sales 2017 13 620 M
EBIT 2017 2 192 M
Net income 2017 1 389 M
Debt 2017 1 001 M
Yield 2017 2,63%
P/E ratio 2017 10,32
P/E ratio 2018 12,31
EV / Sales 2017 1,14x
EV / Sales 2018 1,08x
Capitalization 14 489 M
Chart COVESTRO
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Covestro Technical Analysis Chart | 1COV | DE0006062144 | 4-Traders
Technical analysis trends COVESTRO
Short TermMid-TermLong Term
TrendsBullishNeutralBullish
Income Statement Evolution
Consensus
Sell
Buy
Mean consensus OUTPERFORM
Number of Analysts 22
Average target price 74,3 €
Spread / Average Target 3,9%
EPS Revisions
Managers
NameTitle
Patrick Webster Thomas Chief Executive & Financial Officer
Richard Pott Chairman-Supervisory Board
Klaus Schäfer Chief Technology Officer
Petra Kronen Vice Chairman-Supervisory Board
Thomas Fischer Member-Supervisory Board
Sector and Competitors
1st jan.Capitalization (M$)
COVESTRO9.44%17 316
LG CHEM LTD--.--%23 027
FORMOSA PLASTICS CORPORATION--.--%19 645
FORMOSA CHEMICALS & FIBRE CORPORATION--.--%18 127
LOTTE CHEMICAL CORP--.--%11 241
DAICEL CORP5.17%4 255