Rhone-Poulenc launches Rhodia flotation

Author: Neil Sinclair


LONDON (CNI)--Rhone-Poulenc's initial public offering (IPO) of shares in Rhodia, its speciality chemicals subsidiary, was launched Monday.

About 48.5m shares, equivalent to 30% of Rhodia's capital, is being offered. The share price will be set according to the "bookbuilding" procedure, within a price range of FF115 ($19.4) and FF140 ($23.7), according to Paris-based Rhone-Poulenc. Orders to buy shares must be placed before 24 June.

A maximum of 3.5m shares in the offering will be reserved for employees and retired employees of Rhone-Poulenc and those companies in which Rhone-Poulenc directly or indirectly owns more than a 50% equity interest.

At the same time as the IPO, Rhodia will proceed with an equity increase made up of a maximum of 1.5m shares, reserved for Rhodia employees and those of subsidiaries in which Rhodia holds more than a 50% equity interest.

An over-allotment option of about 4.4m shares will be granted to the underwriters of the global offering. The offering will be underwritten by a banking syndicate led by SBC Warburg Dillon Read, global co-ordinator, with Morgan Stanley and Societe Generale acting as co-global co-ordinators.

Rhone-Poulenc said Rhodia stock will be listed on the New York Stock Exchange (NYSE) and Paris bourse from 25 June.

Jean-Rene Fourtou, chairman and chief executive of Rhone Poulenc, said a separate listing should lead to increased market valuation of Rhodia. However, he added: "Today it would not be in the interests of Rhone-Poulenc's shareholders to divest 100% of Rhodia, which has a strong potential to increase in value."

(Additional reporting by Mary Ann Tawasha in Houston)