VW plans to launch downscaled Traton IPO next week - sources


By Arno Schuetze and Abhinav Ramnarayan

FRANKFURT, May 28 (Reuters) - Volkswagen VOWG_p.DE is looking to officially launch the stock market listing of its trucks unit Traton next week with a smaller deal size than originally anticipated, people close to the matter said on Tuesday.

The carmaker earlier this month revived the plans to list Traton as it announced a corporate restructuring that includes investment in battery cell production and selling off non-core assets.

Traton declined to comment while Volkswagen was not immediately available for comment.

The sources said that while the offer volume has not yet been finalised Volkswagen may float 10-15 percent of Traton in a deal that could value it at more than 15 billion euros ($16.78 billion).

The deal, worth around 2 billion euros, falls short of Traton Chief Executive Andreas Renschler'soriginal expectations. Last summer, hetalked of selling a quarter of the company for more than 6 billion euros.

The sources cautioned that the launch is not yet certain and could again be delayed at the eleventh hour, as in March when plans were shelved.

"Doing a smaller deal size initially at the expense of some valuation is perhaps how potential issuers need to think about approaching the IPO market now," one of the people said.

"You have got to approach the IPO market with appropriate respect and caution. Investors are going to be disciplined on price and you have to listen to them," said another person close to the matter, discussing the IPO market in general rather than the Traton deal in particular.

He added that in a smaller deal it would be easier to attract investor demand and to potentially scale back allocations to bolster pricing.

Another person said that analysts were still working on research notes and there were no final views yet on valuation.

"Overall, the market environment is not significantly better or worse than in March," the person said, adding that that should allow for a valuation roughly similar to what was expected at the time.

VW plans to build a global trucks business by integrating Traton's MAN and Scania divisions to challenge Daimler DAIGn.DE and Volvo VOLVb.ST.

A flotation could allow the truck and bus unitto build a war chest to deepen its relationship with Navistar NAV.N, a U.S. truck maker in which it now owns a 16.85 percent stake. ($1 = 0.8939 euros)

(Additional reporting by Alexander Huebner, Editing by Tassilo Hummel and Thomas Escritt)

((arno.schuetze@thomsonreuters.com; +49.69.7565.1197; Reuters Messaging: arno.schuetze.reuters.com@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

More Related Articles

Info icon

This data feed is not available at this time.

Sign up for Smart Investing to get the latest news, strategies and tips to help you invest smarter.