Evonik Refutes Financing Doubts as BASF Standoff Enters Political Arena

Evonik has moved swiftly to bat down suggestions that its balance sheet is anything but sound, pushing back against claims of problematic financing arrangements and pointing to recently upgraded credit ratings as proof of its financial health. The rebuttal, reported by Handelsblatt, followed public remarks by Michael Vassiliadis questioning the specialty chemicals group's financial setup — an accusation the Essen-based company rejected outright.

The exchange lands at an awkward moment. Speculation about Evonik's independence has been swirling for weeks, ever since BASF tabled an initial approach roughly three weeks ago at 22.15 euros per share. Management dismissed that figure as too low without hesitation. Sources cited by dpa-AFX have since indicated BASF would be willing to discuss a higher price — but only after gaining access to Evonik's books. The company, for its part, insists no negotiations are currently underway.

Politics Joins the Fray

The tug-of-war shifted onto the political stage on Wednesday, when North Rhine-Westphalia's state parliament debated BASF's interest in the Essen-based group. CDU politician Björn Franken told the chamber that no binding offer had reached the company and that the executive board had clearly rejected the advances. According to dpa, no firm bid from Ludwigshafen has materialized.

Düsseldorf had already staked out its position on October 10, with the state chancellery stressing that it insists on Evonik remaining independent. The RAG-Stiftung's board of trustees has likewise been briefed on the interest from Ludwigshafen, though it stopped short of passing any resolutions. Together, the state government and the foundation — Evonik's anchor shareholder — form a broad front of caution, with substantial concerns centering on industrial co-determination and the safeguarding of regional sites across North Rhine-Westphalia.

Sweeteners on the Table

To soften those reservations, BASF has signaled flexibility on the terms surrounding any deal. People close to the company told Reuters on Monday that it is prepared to take over Evonik's existing site and employment guarantees in full. Even that concession has so far failed to move management's stance. Evonik had already turned down the first offer, valued at 10.3 billion euros — or 22.15 euros per share — as insufficient, while BASF reportedly keeps the door open to raising its bid, contingent on a look at the books.

Portfolio Work Continues Regardless

None of this has slowed Evonik's own restructuring. The sale of its C4 unit Oxeno has reached the decisive stage, with several financial investors and strategic bidders advancing to the second round. Final offers for the business are expected in November.

On the operational side, the group launched a polyurethane foam recycling initiative in Japan on Tuesday alongside Toyotsu Chemiplas and Sanyo Chemical. The project aims to establish closed material loops for the plastic and open up new prospects in the Asian market.

Market Stance

Equity investors are pricing in the uncertainty. Evonik shares closed Friday's session at 21.32 euros, 2.4 percent below the 52-week high of 21.84 euros touched midweek. The stock has nonetheless climbed 60 percent since the start of the year, keeping it within striking distance of that peak. With a formal offer still pending, the shares lack the catalyst for a breakout — and whether BASF puts a binding proposal on the table is likely to dictate the next move.