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Blackstone cashes out of Celanese

Blackstone is planning to sell up to 23m shares in New York-listed Celanese, a German chemicals company, cutting its stake to below 50% and raising up to US$447.1m. This would potentially take the US giant’s cash returns from Celanese to more than US$3bn in less than two years.

In a Securities and Exchange Commission filing on November 1, Blackstone said it would sell 20m shares at up to US$19.44 each to take its stake to 50.76%, with another 3m shares in the greenshoe.

This would raise US$447.1m at this price, although the shares are currently trading at US$17.80 each, just off a 52-week high of US$20.06.

Blackstone sold 50m shares in the recent IPO of the company at US$16 each, raising US$800m.

The flotation also gave it more than US$1bn in a special dividend while the buyout firm took out a further US$500m and US$750m of equity through two refinancings in 2004.

Celanese has thus delivered a strong result for Blackstone so far. The firm paid US$4bn, including US$850m in equity, to take the company private from the German stock market in 2004 and to re-list it in New York in January 2005.

This quick flip has been described by bankers as a value arbitrage buyout, where part of the return comes from delisting on one exchange at a low point in investor sentiment.

Money is made by floating on another exchange where sentiment is stronger.