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Volkswagen has confirmed its intention to float a portion of its prized Porsche sports-car brand within weeks, in what is likely to be one of Germany’s largest-ever public debuts.
The group said its supervisory board had decided to target a listing in Frankfurt at the end of this month or the beginning of October, “subject to further capital market developments”.
VW, which first revealed in February that it was considering a Porsche IPO, said it would sell 12.5 per cent of the Stuttgart-based subsidiary directly to new investors, adding that the Qatar Investment Authority, one of VW’s largest shareholders “has expressed strong interest” in buying almost 2.5 per cent of this tranche.
VW’s anchor shareholders, the Porsche-Piëch families, would buy a further 12.5 per cent of Porsche at a premium of 7.5 per cent.
Analysts have calculated that Porsche, which has consistently been the most profitable of Volkswagen’s 10 marques and has impressed the market with its electric Taycan model, could attract a valuation of €60bn-€85bn.
If such a valuation is reached, Porsche’s IPO would eclipse Deutsche Telekom’s $13bn listing in 1996, at the time Europe’s largest ever.
Arno Antlitz, VW’s chief financial officer, said an IPO would help the company make the “significant investment in new technologies” that is required in its transition to electric vehicles.
However, investors have expressed unease about the timing and structure of the offering. No voting shares will be offered to the public, leaving Volkswagen’s current shareholders and powerful unions in control of Porsche and further complicating the Wolfsburg-based group’s much-criticised corporate governance structures.
Despite justifying the flotation of Porsche as a move that would give the luxury brand more “entrepreneurial freedom”, Volkswagen handed Porsche chief executive Oliver Blume overall control of the VW group in July, and announced that he would continue to serve in both roles.
A survey of investors carried out by Bernstein in the immediate aftermath of that decision found that more than 70 per cent viewed this dual-mandate negatively, and more than 40 per cent would prefer it if the flotation were postponed or scrapped.
Blume has said he will recuse himself from all decisions pertaining to the listing. In a statement late on Monday, VW emphasised that “the existing industrial and strategic co-operation” between Volkswagen and Porsche AG “would be comprehensively continued after the IPO”.
In the event of a successful IPO, Volkswagen said it would convene an extraordinary general meeting in December, at which it would propose using roughly half of the IPO proceeds to pay a one-off dividend, much of which would help fund the Porsche-Piëch families’ purchase of voting shares.
The company had previously said it would also distribute a one-off €2,000 bonus to roughly 130,000 German employees.
The remaining revenues are likely to be used to fund VW’s transition to electric vehicles, specifically the building of battery plants.
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