Porsche AG should go public in the fall if possible. From the end of September or beginning of October, part of the papers of the sports car subsidiary could be placed on the financial market, as Volkswagen announced late Monday evening after consultations with the board of directors and the supervisory board. A listing in Frankfurt is the aim; the new issue could be fully implemented by the end of the year. These steps are planned "subject to further capital market developments", it said.
The Wolfsburg group and the Porsche parent company Porsche SE (PSE) had been examining the IPO since February. Europe's largest car manufacturer wants to tap into additional sources of money in order to pay for further investments in e-mobility and digitization. He also hopes for an increase in the value of the entire VW Group.
Yield pearl of the multi-brand group
The share capital of Porsche AG has already been split half into non-voting preferred shares and half into voting common shares, as Volkswagen explained. Up to a quarter of the preferences - i.e. about an eighth of the total shares - are then expected to go on sale. At the same time, the PSE gets 25 percent plus one share of the stock shares, it is to retain influence on central AG decisions via a blocking minority.
The Stuttgart-based company has long been a pearl of profitability in the multi-brand group. The operational business with models such as the 911, Cayenne, Macan, Panamera and Taycan is bundled in Porsche AG. In contrast, PSE, controlled by the Porsche and Piëch families, holds most of the voting rights in Volkswagen.
Both companies had previously pointed out that the concrete implementation of a Porsche AG IPO also depends on suitable market conditions. In particular, the consequences of the war in Ukraine, the very sharp increase in energy prices worldwide and new problems in the supply chains made it difficult from her point of view to determine a suitable point in time. However, the current decision now marks a crucial further stage for the plans.
Qatar expresses "strong interest"
The major shareholder Qatar, as the third most important VW owner, has "expressed strong interest" and could receive almost 5 percent of the Porsche advantages, according to VW. But private investors in Germany, Austria, Switzerland, France, Italy and Spain should also get a chance.
"In the event of a successful IPO, Volkswagen AG will convene an extraordinary general meeting for December 2022," the group said. It should be proposed "to distribute a special dividend in the amount of 49 percent of the total gross proceeds from the placement of preferred shares and the sale of common shares to shareholders at the beginning of 2023". Porsche SE added that its executive board, with the approval of its own supervisory board, had "decided to continue pursuing the transaction and to enter the next phase of preparations".
Valued at 80 to 100 billion euros
VW is building on getting extra funds for investments in the coffers. A sum in the high double-digit billions is already planned for the next five years, if you take into account the projects for electric cars, software and networking platforms alone.
When assessing the planned start of trading in preferred shares, some analysts recently assumed that Porsche AG would be between 80 and 100 billion euros in a normal market environment. If the entire preferred tranche and thus 12.5 percent of the capital were to be placed, this would correspond to an issue volume of a good 10 billion euros at the lower end of this range.
The Porsche and Piëch families are said to want to give PSE more direct access to the car manufacturer with their name again by restructuring the shares and going public. In 2008/2009, Volkswagen was able to fend off a takeover attack by the then Porsche management. The Lower Saxony turned the tables and in turn swallowed the profitable subsidiary, the two families got the majority in the car giant in return.
Flower in double role
When the tests were announced, some market observers had already criticized the mixing of responsibilities in the new design now being targeted. Some investors pointed out possible conflicts of interest because Blume is, at least for the time being, the head of Porsche and the head of the Volkswagen group.
Similar concerns exist in part because of Hans Dieter Pötsch's dual role as chairman of the group's supervisory board and CEO of Porsche Holding. The former VW CFO is closely linked to the Porsche/Piëch clan. Volkswagen had stated that they had made appropriate rules for solid "corporate governance".
The overarching goal of the IPO is also to increase the value of Volkswagen AG in addition to increasing the financial strength of Porsche itself. Compared to the US rival Tesla, the German manufacturers languished in the middle for a long time. Many analysts believe that if Porsche is traded individually on the stock exchange, the company could become more flexible, its value could develop more freely - and indirectly give VW shares a boost.
This would have liked to see Volkswagen catapulted close to Tesla. The expectations of the big competitor seemed a bit exaggerated. In autumn 2021, Tesla was worth over a trillion US dollars - VW came to around 85 billion euros at the beginning of the week.