KNDS, the Franco-German defense powerhouse behind the Leopard 2 and Leclerc tanks, is finding that building investor confidence is harder than building armored vehicles. The company’s planned IPO, set for a dual listing on Euronext Paris and the Frankfurt Stock Exchange, is hitting resistance at valuations above €12B.
That number is a far cry from where things started. Initial expectations pegged the company’s valuation somewhere between €15B and €18B. The current floor of €12B represents a roughly 30% haircut from the upper end of those early projections.
The valuation tug-of-war
On one side, you have potential investors who believe a fair valuation might sit below €12B. On the other, you have Wegmann & Co., one of the existing shareholders, drawing a line in the sand at €12.5B as its minimum acceptable price.
Both the French and German governments are each aiming for a 40% stake in the company after the IPO goes through. Two sovereign states want to collectively control 80% of a publicly traded company while asking private investors to buy in with essentially no say in how the business is run.
