The proposed $1.6 billion initial public offering for Bilfinger Berger's local arm, Valemus, which would've been the largest since Myer's $2.2 billion float in November last year, has been canned.
The local float of Germany's second largest construction group has met with "positive feedback" from institutions, the company says, as it postponed the listing due to adverse market conditions.
Valemus chief executive, Peter Brecht, said his managemen team had met with "a large number of institutions both locally and abroad in the past month and received positive feedback from investors on the Company".
But, "due to the current adverse equity market conditions, we understand why Bilfinger Berger AG has taken the decision to postpone the IPO," Mr Brecht said in a statement.
If the IPO had gone ahead as initially planned and reached the previously announced target of $1.66 billion it would have been the biggest since Myer's $2.2 billion float towards the end of last year and the biggest of FY11 to date.
The decision was disclosed to the Frankfurt Stock Exchange and announced by Bilfinger Berger AG on Monday night.
In its earlier statement, Bilfinger Berger said the postponement was "due to negative developments on the capital markets".
"Bilfinger Berger's asking price for the Australian business cannot realistically be achieved in light of the current adverse conditions on the stock exchange," company chairman Herbert Bodner said.
In Sydney, the benchmark S&P/ASX 200 index has fallen by nearly 13 per cent since the end of last year.
Bilfinger, the second largest German construction company behind Hochtief, had hoped to raise up to $US1.4 billion ($A1.66 billion) through the sales of shares in its Valemus subsidiary.
But Bodner stressed that "we are not under pressure to sell and have always emphasised that we would not part with our successful Australian business at an undervalued price".
Valemus will continue to operate as a subsidiary of Bilfinger Berger AG, as it has done for the past 13 years
Full announcement below:
Valemus IPO postponed
Parent company, Bilfinger Berger AG, confirms decision with Frankfurt Stock Exchange
6 July 2010
Valemus Limited (Valemus) advises that its parent company, Bilfinger Berger AG has decided to postpone the Company's planned initial public offering (IPO) due to adverse equity market conditions in Australia and internationally. This decision was disclosed to
the Frankfurt Stock Exchange and announced by Bilfinger Berger AG last night.
Chief Executive of Valemus, Mr Peter Brecht said: "The Valemus management team met with a large number of institutions both locally and abroad in the past month and received positive feedback from investors on the Company and its leading position in
many of the markets in which it operates. However due to the current adverse equity market conditions, we understand why Bilfinger Berger AG has taken the decision to postpone the IPO."
The Company will continue to operate as a subsidiary of Bilfinger Berger AG, as it has done for the past 13 years
