Status: 09/19/2022 08:50 a.m
Porsche plans to go public at the end of September. The sports car manufacturer from Stuttgart could then have a market value of up to 75 billion euros.
Porsche AG announced details of its planned IPO on Sunday evening. The sports car manufacturer from Stuttgart plans to go public on September 29th. A market value of between 70 and 75 billion euros is targeted. The previous sole Porsche owner, Volkswagen, set the price range for the non-voting Porsche preference shares at between EUR 76.50 and EUR 82.50.
Within the price range, Porsche would be the largest IPO in Germany in more than 25 years. In 1996, according to data from the financial service provider Refinitiv, Deutsche Telekom had earned the equivalent of 9.65 billion euros.
Luxury car manufacturers less sensitive to the economy
The valuation of Porsche AG is in the upper half of the range of 60 to 80 billion euros previously mentioned by investment bankers. For comparison: Volkswagen was valued at a good 87 billion euros on Friday’s closing price on the stock exchange. The Porsche share of 75 percent remaining in the Wolfsburg group after a successful IPO alone accounts for almost two thirds of this.
That is also the calculation behind the IPO: Luxury car manufacturers such as Porsche or Ferrari are valued significantly higher on the stock exchange in relation to their profits than mass manufacturers such as Volkswagen, also because they are significantly less sensitive to the economy.
The subscription period will start tomorrow. It goes up to one day before the IPO, provided that the financial regulator Bafin approves the securities prospectus. Private investors in Germany, Austria, Switzerland, France, Italy and Spain should also be able to purchase some of the Porsche benefits.
Income of up to 9.4 billion euros for VW
The plan is to issue almost 114 million shares. This includes almost 15 million papers for a possible over-allotment, as the parent company VW further announced. If everything goes as planned and the actual offer price settles in the range mentioned, VW could take 8.7 to 9.4 billion euros with the IPO. The major VW shareholder Porsche SE, controlled by the Porsche and Piech families, is buying ordinary shares for a further 9.4 to 10.1 billion euros.
Volkswagen, Europe’s largest car group, wants to tap additional sources of money. VW AG plans to use the proceeds to invest billions more in electromobility and digital. She also hopes to become more attractive to investors.
49 percent of the total proceeds are to be distributed to the shareholders. Arithmetically, this results in a special dividend of around 18 euros per ordinary and preference share. It is to be decided at an extraordinary general meeting in December. The state of Lower Saxony, among others, would benefit from this.
However, the workforce should also benefit. The VW works council emphasized the agreed bonus of 2,000 euros for each employee in the company wage agreement and in Saxony.
Preferred shares primarily for large investors
Most of the preferred shares should not go to small but to large institutional investors. According to VW, Qatar wants to stock up on just under five percent. The Gulf Emirate is already the third most important shareholder in the entire group. Another anchor investor in the Porsche IPO is the Norwegian sovereign wealth fund, in which the central bank in Oslo manages the income from the country’s oil and gas reserves and wants to increase them for future generations. In addition, the US fund company T. Rowe Price and the state investment company ADQ from Abu Dhabi are investing in the Stuttgart-based company.
The Swabians are a pearl of returns in the Wolfsburg multi-brand group. Since the beginning of September, after the departure of Herbert Diess, Porsche boss Oliver Blume has also headed the VW Group board. The company rejected criticism of the dual function with reference to its transparency and voting rules. These should be sufficient to avoid conflicts of interest. The same applies to VW supervisory board chairman Hans Dieter Pötsch, who also heads PSE.
Interests of the major VW owners
At least indirectly, however, the interests of the major VW owners also play a role in one of the largest IPOs in Germany. The Porsche/Piëch clan is said to want to regain more direct access to the sports car manufacturer bearing its name. In 2008/2009, Volkswagen was able to fend off a takeover attack by the then Porsche management. In the end, the Lower Saxony turned the tables and swallowed up the profitable subsidiary. In return, both families received a majority stake in the car giant.
It now seems increasingly unlikely that the listing could be called off in the short term. According to reports, however, there is a minimum evaluation threshold that Volkswagen definitely wants to achieve. In addition, dangers for the auto industry remain – new supply chain problems, the progress of the Ukraine war, inflation in energy prices and the end of the low interest rate phase are just a few.