Rheinmetall AG aims to sell as much as 60 percent of its Kolbenschmidt Pierburg AG car-components unit to investors in an initial public offering, according to two people familiar with the preparations.
The division’s freefloat, or portion of publicly traded shares, may be between 40 percent and 60 percent if the share sale goes ahead, said the people, who declined to be identified because talks are private. Lazard Ltd. is advising Rheinmetall and Deutsche Bank AG, Commerzbank AG and Bank of America Corp.’s Merrill Lynch unit are managing the IPO, they said.
The Dusseldorf, Germany-based company said in a July 28 statement that it was investigating the possibility of listing the automotive unit so that both it and the business’s defense arm might “further develop their market positions with more flexibility.” The company’s 20,000 employees produce automotive parts and weapons systems, and provide engineering services for clients including the German army.
The equities rout since then has hurt the IPO market, which was headed for its best year since 2007. WageWorks Inc. and Cathay Industrial Biotech Ltd. are among companies that have delayed or scrapped first-time share sales as volatile markets sapped demand for new stock. At least nine IPOs have been postponed or canceled since the global slump started Aug. 3, according to data compiled by Bloomberg.
“We have nothing further to add to the issue than that which was said in a press release the week before last,” Peter Ruecker, a spokesman for Rheinmetall, said by telephone today. “Everything in that statement remains valid.”
The IPO may value Kolbenschmidt Pierburg at more than 1 billion euros ($1.4 billion), the people said. The company aims to sell the shares in September and presentations to prospective investors are ongoing, one of the people said. No capital increase is planned, with all the funds going to Rheinmetall, the person said. The final timing for the IPO depends on market developments, the other person said.