PARIS — French-German tank maker KNDS delayed plans for a stock-market listing, citing market volatility for the European defense sector, with the company’s shareholders planning to resume the process for an initial public offering “upon the return of more favorable market conditions.”
The maker of Germany’s Leopard tank and France’s Caesar self-propelled howitzer said it has “completed substantially” all the required preparations for its proposed stock listing in Paris and Frankfurt, and engaged extensively with investors, in a statement published Wednesday night.
The announcement comes just a week after KNDS said it was going ahead with plans for its stock-market listing, and after shares in its closest listed European peers Rheinmetall and Czechoslovak Group took a tumble last week. Shares in both companies have since recovered from last week’s drop, though over the past month Rheinmetall has slipped 13% and CSG is down 17%.
“KNDS and its shareholders will continue to monitor the capital markets conditions closely and stand ready to resume the IPO process as soon as market conditions allow,” the company said.
The Financial Times reported that KNDS has been struggling to convince investors to back an IPO valuation for the company of more than €12 billion (US$13.7 billion).
The most recent European defense company stock market listing was CSG, which listed in Amsterdam in January in what was then the biggest defense IPO ever. The Czech company’s shares have fallen about 44% from their IPO price, cutting its market valuation by more than €11 billion to €13.8 billion.
As part of the listing plan, French state-owned Giat Industries and German family-owned Wegmann & Co will together sell about 20% of KNDS to institutional investors through private placements, with the Federal Republic of Germany buying Wegmann’s remaining 40% stake via Kreditanstalt für Wiederaufbau. France will continue to own a 40% stake in the company through Giat.
KNDS said discussions with investors confirmed that they share the company’s “view of its differentiated industry positioning and their belief in KNDS’s long-term strategy.”
The company and its shareholders remain “fully aligned” on the priorities of delivering for customers, expanding the firm’s European presence and speeding up development of “innovative complete mission solutions” to strengthen European defense, KNDS said.
Rudy Ruitenberg is a Europe correspondent for Defense News. He started his career at Bloomberg News and has experience reporting on technology, commodity markets and politics.
