FRANCO-GERMAN DEFENCE IPO HITS PRIVATE EQUITY SNAG

KNDS was about to bag a great deal. The Franco-German tank maker had a call option to up its stake in Renk, a $6 billion German-based maker of gearboxes for armoured vehicles, from 7% to 25%. With the call price at 20 euros a share and Renk currently trading at nearly 60 euros, KNDS faced a nice-to-have paper profit of more than 730 million euros. Yet Triton Partners, the buyout firm owning the shares, is having second thoughts about handing them over. The dispute is now for a German court to decide, but it could alter plans by KNDS’s shareholders for an initial public offering this year.

The options deal dates back to Renk’s February 2024 listing, four years after Triton bought the unit from Volkswagen. The shares soared 20% on their first trading day, have risen threefold since then, and outperformed all other European defence companies this year. Triton says KNDS failed to get Italian regulatory approval, which KNDS alleges it didn’t need.

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