09 February 2015 by lberuti
Like most other high beta names, LXSGR (Lanxess AG) was put under pressure first thing this morning on the back of worrying signals coming from the current stand-off regarding the debt of Greece. But all that changed at the end of the morning when it surfaced that LXSGR could be looking to sell a stake in its synthetic-rubber unit and form a joint-venture. If it happens, the transaction will improve the overall business profile by helping reduce their reliance on the cyclical rubber unit. Depending on the partner in the JV, it could also help them getting access to cheaper raw materials. And finally, it would give LXSGR the option to either reduce their leverage or use the proceeds to buy other assets and further enhanced their portfolio mix. After initially having traded up to 100bps, LXSGR’s 5 year risk premium eventually closed 8bps tighter at 90bps in an otherwise cautious market.