Evonik Shares Rise 2.6% on Renewed BASF Takeover Speculation

Evonik shares rose 2.6% on reports that BASF may submit a new takeover proposal for the specialty chemicals firm. The market reaction follows the company's rejection of a previous bid in September, which valued Evonik at €22.15 per share.

That earlier offer represented a nearly 25% premium to the three-month average share price of Evonik. The potential for a renewed bid has focused attention on the valuation gap between current trading levels and the levels previously considered by the board.

"We struggle to identify a valuation scenario where Evonik shares sustainably exceed €22 per share without a broader sector recovery," analysts at Citi stated in a recent research note.

Valuation and Financial Impact Analysis

Citi analysts have modeled the potential financial impact of a successful acquisition for BASF. According to their projections, an offer at €25 per share would result in approximately 20% EPS and free cash flow accretion for BASF through 2030. The analysts cautioned that such a deal would likely result in a decline in the return on invested capital for the acquiring firm, estimating it would drop to about 9%.

For context, the most recent share placement for Evonik executed by major shareholder RAG occurred at €19.99 per share. This figure provides a recent benchmark for the stock valuation, sitting below both the previous rejected offer and the levels currently speculated by market observers.

Sector Challenges and Strategic Outlook

The speculation centers on the state of the European specialty chemicals sector. Analysts note that the standalone valuation of Evonik has faced headwinds, making it a target for consolidation as larger players like BASF seek to optimize their portfolios.

Whether a new offer materializes depends on the appetite of BASF for the potential dilution of its return on invested capital, weighed against the long-term accretion benefits identified by market analysts. The market remains focused on whether the board at Evonik would view a revised offer as sufficient, given their previous rejection of the €22.15 per share proposal.