In today’s briefing:
- ADNOC/Covestro: Bargaining On
ADNOC/Covestro: Bargaining On
- Covestro AG (1COV GR) has been the subject of a potential takeover from ADNOC since Bloomberg reported on 20 June. The last reported potential offer is €60/share (c.€11.3 billion).
- ADNOC could be willing to offer €64.5 (7.1x EV/EBITDA on mid-cycle €2,110 million EBITDA), but Covestro is rumoured to seek €70/share (typical chemicals 6x on €2,675 million EBITDA, likely demanding).
- Considering a takeout price of €60, gross spread is 11.7% and the shares are pricing a 64% probability of deal completion. I’d be long at €53/share, as downside seems limited.
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