KNDS has been in talks with the banks coordinating its IPO and is weighing whether to postpone the deal, people familiar with the discussions said. That review lifts the odds that one of Europe's marquee listings could be pushed past year end. The company said, "KNDS and its shareholders will continue to monitor market conditions closely and stand ready to resume the IPO process."
According to the people, advisers cited weak trading in defense stocks, with Rheinmetall AG among them, and therefore recommended delaying. Rheinmetall's stock is down over one-third year-to-date, whereas a Goldman Sachs Group Inc. gauge of European defense names has been roughly unchanged. In a market already short on new flotations and prone to holdups, another delay would be a setback for Europe's listing calendar.
In June, KNDS proposed a dual listing in Frankfurt and Paris, after striking a deal under which the German government would buy a 40% stake from the company's family owners through the IPO - a setup that would make Germany and France co-owners of the public company. Soon after unveiling those plans, KNDS hit pause when it could not drum up enough demand even at a reduced €12 billion ($13.8 billion) valuation, citing volatility across Europe's defense sector.
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Talks with banks are continuing, and the timing could shift with market conditions, the people said. In August, Bloomberg News said KNDS intended to resume meetings with investors for a potential IPO.
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