* Offer price range 26.50-35.50 eur/shr

* Number of shares to be adjusted to reach 2.5 bln proceeds

* Oct. 2 slated as first day of trading

* Targeted free float 34-40 pct (Adds details on planned free float, date of listing, stabilisation measures, background)

By Ludwig Burger

FRANKFURT, Sept 18 (Reuters) – Bayer's plastics division Covestro aims to raise about 2.5 billion euros ($2.84 billion) with an initial public offering (IPO), it said on Friday, in what could become the largest stock market debut in Germany in almost 15 years.

Bayer has carved out the business, formerly known as Bayer MaterialScience, to focus on drugs and pesticides and to improve its market value by removing the discount typically applied to diversified companies.

Covestro said on Friday it would offer between 70.4 million and 94.3 million new shares from a capital increase at an issue price of between 26.50 euros and 35.50 euros apiece.

The number of shares to be issued will depend on the issue price in order to arrive at gross proceeds of about 2.5 billion euros, it added.

That would make it the biggest listing in Germany since mail and logistics group Deutsche Post went public in a 6.25 billion euro transaction in November 2000. A more recent flotation of comparable size was Tognum in 2007, worth 2 billion euros.

Bayer unveiled plans a fortnight ago for a flotation of new Covestro shares in the fourth quarter, with proceeds earmarked to redeem debt made to Covestro by parent company Bayer.

Having transferred some of its own debt to the Covestro subsidiary will give Bayer more firepower to expand in healthcare, veterinary medicine and farming pesticides.

The subscription period for Covestro's IPO will run from Sept. 21 until likely Oct. 1, with the first day of trading on the Frankfurt Stock Exchange slated for Oct. 2, Covestro said.

Depending on the number of new shares to be sold, the free float will be about 34 percent at the top end of the price range, 37 percent at mid-range and around 40 percent at the lower end of the range.

To smooth out any slumps in the stock price within the first 30 days of trading, the banks managing the IPO are authorised to buy back shares of up to 10 percent of the emission volume. (Reporting by Ludwig Burger; Editing by Maria Sheahan)

http://www.reuters.com/article/2015/09/18/bayer-covestro-range-idUSL5N11O37T20150918