Evonik's Boardroom Holds the Key as BASF Circles and the Stock Sits a Hair Off Its High

Evonik closed at 21.46 euros, up 2.4%, as RAG-Stiftung left the next move on a BASF offer to the two companies' executive boards.

Evonik's quarterly report won't land until 3 November, but the market has already decided what matters more: whether BASF gets a handshake. The specialty chemicals maker is running its business as usual — new recycling ventures, fresh pharmaceutical ingredients, the steady drumbeat of operations — while every tick in its share price is being set by takeover arithmetic rather than earnings.

The equity closed at 21.46 euros on Tuesday, a 2.4% gain, leaving it just 0.7% shy of its 52-week peak of 21.62 euros. Since BASF confirmed exploratory talks roughly two weeks ago, the stock has climbed 8.0%, a move that says as much about the floor a potential bid provides as it does about Evonik's standalone prospects.

The Foundation Passes the Buck

At the center of the standoff sits the RAG-Stiftung, still Evonik's largest shareholder. Its board of trustees met on 9 October to review BASF's interest, and according to Handelsblatt, the body declined to take a position either for or against an offer. Instead, it pushed the next move to the executive boards of the two companies. No decision was on the table, and the substance of the deliberations stayed confidential.

That silence is doing a lot of work. Media reports indicate Evonik turned down BASF's approach, though BASF has publicly described the outcome of its soundings as open. Evonik itself confirmed only that it received an unsolicited indication of interest for a voluntary public takeover offer covering all shares. BASF has since pressed for negotiations and, per press accounts, signaled it could sweeten its terms. Investors and analysts have floated a figure of up to 25 euros per share as conceivable.

To smooth the path, BASF has offered job guarantees: no compulsory redundancies, with any headcount reduction limited to voluntary departures backed by severance packages.

Labor Pushback and a Fresh Approach

Not everyone is warming to the idea. Michael Vassiliadis, head of the IG BCE union, questioned in an internal letter to works councils dated 7 October whether the RAG-Stiftung should sell its entire Evonik stake to BASF at all. Meanwhile, Ulrich Hocker, president of the German association for private shareholders (DSW), expects BASF to make another run at the company in the coming weeks — a view that has taken hold among investors and shareholder representatives alike.

Analysts Reprice the Floor

The bid interest has reshaped how the street values Evonik. Berenberg's Sebastian Bray upgraded the stock from "Sell" to "Hold" — on 2 October according to one account, 5 October per another — and lifted his price target from 15.50 to 20 euros, citing BASF's courtship as a possible cushion for the shares. Parmantier & Cie. reaffirmed its "Hold" rating on 6 October with a 12-month target of 20.50 euros. Most recently, LBBW raised its target to 22 euros on Tuesday while keeping a "Hold" recommendation. Until the quarterly figures arrive in early November, headlines from the negotiating table are likely to set the tempo.

Meanwhile, the Engines Keep Running

None of this has stopped Evonik from pursuing its own agenda. On Tuesday the group launched a Japan-based initiative with Toyotsu Chemiplas Corporation and Sanyo Chemical Industries aimed at recycling polyurethane foam, recovering polyols and amines from discarded material for use in new products. Earlier in the month, the company unveiled a biodegradable polymer platform for pharmaceutical excipients — a reminder that there is an operating story underneath the takeover noise.