This will be one of the largest quotes ever made in Europe. The world’s second largest automobile group Volkswagen gave the green light on Monday evening to introduce its subsidiary Porsche on the stock market.
The management board of Volkswagen « decided today, with the approval of the supervisory board », to list the shares of its subsidiary Porsche AG « subject to further developments on the capital market » with a view to « implementing by the end of the year”, according to a statement from the two bodies that met during the day.
The start of the IPO will be given « at the end of September or beginning of October » with the intention of « floating » (« intention to float ») part of the capital of Porsche, a prelude to the public placement of the shares.
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Interest from international investors
The German manufacturer unveiled its project last winter, on February 24 exactly, the first day of the Russian army’s invasion of Ukraine. The economic shocks that followed, especially on the stock markets, had cast doubt on the timing of this « IPO » – the listing of Porsche on the stock market.
But the manufacturer of the mythical 911 has always aroused the greed of investors, who value the Zuffenhausen company, near Stuttgart (southwest), between 60 and 85 billion euros, according to Bloomberg.
International investors including the American T Rowe Price Group, and the sovereign investment fund of the emirate of Qatar, have already expressed their interest in subscribing to the operation, alongside billionaires such as the founder of the energy drink manufacturer. Red Bull, Dietrich Mateschitz, as well as the president of LVMH, Bernard Arnault, according to the agency.
Actions offered to the general public
Porsche is currently wholly owned by the Volkswagen Group. This in turn is controlled by a financial holding company, called Porsche SE, through which the Porsche-Piëch family holds an absolute majority of voting rights (approximately 54%). The German region of Lower Saxony is also a direct shareholder of Volkswagen, up to 20%, thus being able to exert its influence there. This construction prevents to date the Porsche-Piëch family, majority shareholder of the Porsche holding company, from exercising a significant influence on the Volkswagen group and therefore on the Porsche nugget.
Porsche’s capital was split into 50% preference shares, offering a boosted but non-voting dividend, and 50% ordinary shares with voting rights.
Institutional investors will be able to subscribe “up to 25%” of the preferred shares, for a price that is still undetermined. They will also be offered to the general public in Germany, Austria, France, Italy, Spain and Switzerland, Porsche said in a separate press release.
At the same time, the authorities of VW approved the sale of “25% plus one share” of the “ordinary” shares of Porsche AG to the Porsche SE holding company. Thus the Porsche-Piëch clan will hold a blocking minority in the family business.
Invest in electricity
The « IPO » of Porsche must also give a boost to the stock market valuation of the parent company, which remains behind at some 85 billion euros, in particular against the big competitor Tesla which is worth roughly ten times more.
By giving up a fraction of its control over Porsche, Volkswagen will obtain the billions needed to finance its investments in the electric, connected and autonomous car.
The manufacturer of the electric Taycan plans to launch a new all-electric SUV model. To meet global demand for electrified luxury vehicles, 80% of the car manufacturer’s vehicles will be fully electric by 2030, promised Oliver Blume, Volkswagen’s new boss since September 1, until then chairman of the board of Porsche and which remains for the moment.
Above all, it is “a historic moment for Porsche”, declared Oliver Blume. Partly listed on the stock exchange, Porsche will have « greater independence » by being one of the « most successful sports car manufacturers in the world ».