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Mid Cap
Market Cap £1.17bn
Enterprise Value £1.01bn
Revenue £697.4m
Position in Universe 326th / 1040

Leoni scouts market for bidders for wire and cables division - sources

Mon 29th July, 2019 4:57pm
FRANKFURT, July 29 (Reuters) - German car parts maker Leoni
 LEOGn.DE  has started holding meetings with prospective buyers
for its wire and cables division, which it has put on the block
in a bid to bolster its cash position, people close to the
matter said.
    After sending out information packages earlier this month,
Leoni's management is holding informal talks with potential
bidders, they said. Preparations for a listing of the unit have
been put on the backburner given market conditions, they added. 
    Leoni is hoping to whet the appetite of peers such as
Huber+Suhner  HUBN.S , Prysmian  PRY.MI , Adient  ADNT.N  or
Deren, they said, adding that private equity groups such as
Triton, Bain or KKR  KKR.N  were also being targeted. 
    Leoni needs to refinance Schuldschein notes worth about 200
million euros ($222.70 million) next year. It said in May that
its liquidity had decreased by a quarter to 740 million euros at
the end of March, of which 120 million was in cash holdings. 
    The company is expected to update investors on its liquidity
when it releases second-quarter earnings figures on August 14. 
    Brokerage Hauck & Aufhäuser in May called the free cash flow
development at Leoni "alarming", while analysts at LBBW at the
time said that a valuation of only half of the company's book
value was adequate and a capital increase conceivable. 
     Leoni said earlier this month that would explore a listing
or sale of its Wire and Cable Solutions (WCS) business, which
supplies the healthcare, factory automation, transportation and
automotive markets.*:nL8N24B15X
    "The wire and cable business with industrial clients will
likely see robust demand, while interest in the unit catering to
carmakers is limited," one of the sources said. Industrial
clients account for roughly 2 billion euros of the unit's 5
billion in sales. 
    For private equity groups, Leoni is a difficult target as
banks would struggle to finance such a buyout, another source
said, adding that investors could always buy up debt and take
control of the company in the event of a debt restructuring. 
    Deutsche Bank and UBS are advising Leoni on the unit sale,
while Rothschild has been brought in as restructuring advisor,
the people said.
    In March, Leoni abandoned its 2019 profit targets, announced
job cuts and said the company's finance chief would
    Reuters reported in December that Indian car wiring maker
Motherson Sumi  MOSS.NS  was in early talks with Leoni over a
possible merger, but the negotiations never gained sufficient
traction, people close to the matter said.*:nL8N1YJ1DU

($1 = 0.8981 euros)

 (Reporting by Arno Schuetze, Alexander Hübner and Edward
Taylor; Editing by Jan Harvey)
 ((; +49.69.7565.1197; Reuters
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