FRANKFURT (Reuters) - German drugs and pesticides group Bayer (BAYGn.DE) is selling 1.2 billion euros ($1.4 billion) worth of Covestro (1COV.DE) shares under its plan to fully sever ties with the plastics business over the medium-term.
The company, which is trying to wrap up the $66 billion takeover of U.S. seeds giant Monsanto (MON.N) by the end of the year, did not specify how many shares in Covestro it would sell for the targeted sum.
Based on Tuesday’s closing price, the stake for sale would represent about 9 percent of Covestro but the percentage will probably be higher since a block of shares of that size is typically placed at a discount.
After a number of previous large trades, Bayer’s stake in the maker of transparent plastics and materials for insulation and padding foam has declined to 40.9 percent while Bayer’s pension trust holds a further 8.9 percent.
Bayer said in a statement that an accelerated bookbuilding process aimed at institutional investors was launched on Tuesday after market close with Barclays (BARC.L) and Citigroup (C.N) acting as joint bookrunners.
It has agreed to hold off on placing more Covestro shares for 90 days. Bayer spun off Covestro as a separate listed company two years ago.
Reporting by Ludwig Burger; Editing by Maria Sheahan/Keith Weir