Status: 10/11/2022 1:32 p.m
Measured against the difficult market environment, the IPO of Porsche AG was a success. The banks have prematurely stopped their support purchases. However, VW could not redeem the planned maximum.
A good two weeks after the IPO of Porsche AG, Volkswagen has taken stock: the Wolfsburg-based car manufacturer has raised 9.08 billion euros from the sale of Porsche preferred shares. This is below the targeted maximum proceeds of EUR 9.4 billion because only part of the placement reserve – also known as greenshoe or over-allotment option – could be sold.
This is due to the currently weak market environment. As a rule, it is also possible to sell the placement reserve to new shareholders if the offer was previously oversubscribed several times, as in this case. Due to the difficult framework conditions, however, the accompanying banks, led by Bank of America, were forced to intervene to support the market.
Support purchases ended early
In the first few days after the initial listing, Bank of America bought 3.79 million Porsche securities from the placement reserve for 312.8 million euros on the market. This should prevent the price from falling too far below the issue price of EUR 82.50. Such support purchases are only permitted up to the issue price.
After that, the Porsche share rose to 93.70 euros. Because the paper is stable above the issue price, Bank of America was able to prematurely end the four-week support measures for the share. At noon today, the share was listed at 85 euros.
19 billion total proceeds
After completion of the transaction, 110.1 million shares in Porsche AG are now traded on the stock exchange. This means that 24.2 percent of the preferred shares are in free float, i.e. in numerous holdings of less than five percent.
Together with the 25 percent of Porsche ordinary shares that Volkswagen is selling to its parent company, Porsche SE, which is also listed, the Wolfsburg-based car manufacturer will be making a total of more than 19 billion euros from the partial sale.
Special dividend beckons
The group intends to invest 51 percent of this in the expansion of its e-car business. 49 percent are to be distributed to the company’s own shareholders in the form of a special dividend. That’s more than nine billion euros – or about 18 euros per Volkswagen share.
The ordinary shares will be sold to Porsche SE in two stages. The family holding has already paid almost 7.1 billion euros for 17.5 percent of the ordinary shares. Another 7.5 percent are to follow for three billion euros at the beginning of 2023 as soon as VW has paid the special dividend – from which Porsche SE can in turn expect around three billion euros.