KNDS NV's board is scheduled to convene Thursday to make a decision on whether to advance with an initial public offering, according to people familiar with the matter. The outcome of that meeting hinges on a separate transaction between the firm's German family owners and the German government.
The family that holds a 50% stake in the tankmaker has been negotiating terms to sell a substantial portion of its holding to Berlin. That sale is being treated as a critical enabler for the company's proposed listing, the people said.
In recent days the family and the German government have exchanged proposals aimed at structuring a purchase that would allow Berlin to acquire the stake after KNDS becomes a public company. The parties are reported to be close to finalizing an agreement that would permit the government to buy the holding once the IPO has been completed.
According to the people, the family has put forward a proposal to sell at a price that takes into account how the shares trade in early public markets, rather than fixing a full private-sale price in advance. Should the two sides reach terms, KNDS could open plans for its IPO as soon as Friday.
Sources said a transaction under the current proposals could place a valuation on KNDS of up to 15 billion ($17.4 billion). The company is co-owned by the German family on one side and the French government on the other, with each holding roughly half of KNDS.
People close to the discussions warned that if an accord is not struck between the family and the German government, the listing could be deferred. In that scenario, the family and the French government - the latter owning the other 50% - might opt to push the IPO to later in the year, the people said.
Context limitations: Reporting is based on people familiar with the situation; details remain subject to confirmation by the parties involved and to the outcome of the board meeting.