Volkswagen and the largest investor heading towards the IPO of Porsche

  • Volkswagen, Porsche SE negotiate framework agreement
  • Volkswagen can issue an equal number of common preferred stock sources
  • May list 25% of Porsche AG, no deal yet – sources
  • Porsche SE shares rose 15.2% and Volkswagen 10.2%

HAMBURG / BERLIN, Feb 22 (Reuters) – Volkswagen (VOWG_p.DE) Its largest shareholder has struck a preliminary agreement to list Porsche, paving the way for a deal that investors hope will unlock value from the luxury car brand and could be one of the world’s largest debut stock markets.

Analysts estimate that Porsche could be worth as much as 90 billion euros ($102 billion) in an initial public offering (IPO), compared to VW’s current market value of about 116 billion euros.

The list could also change the balance of power at Europe’s largest automaker, which was carefully engineered in the wake of Porsche’s failed takeover of Volkswagen in 2009, which led to Volkswagen taking over the luxury brand.

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At the time, the Porsche and Bich families became the most influential investors in Volkswagen through their holding company Porsche SE. (PSHG_p.DE)which owns 31.4% of Volkswagen and 53% of the carmaker’s voting rights.

Two sources familiar with the matter told Reuters that Volkswagen may issue an equal number of Porsche common and preferred shares in a potential initial public offering and may pay special dividends to owners to mobilize support.

Ordinary shares confer voting rights and Porsche SE said it may purchase such shares in any Porsche AG listing.

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The sources said Volkswagen may seek to list 25% of Porsche’s shares if the initial public offering goes ahead.

Shares in Volkswagen and Porsche SE jumped 10.2 and 15.2%, respectively, as investors hope the listing will boost the value of the Porsche brand and give Volkswagen additional financial leverage to switch to electric vehicles. Read more

Sources previously said that the Porsche and Beech families may decide to reduce their stake in Volkswagen to buy an IPO of Porsche AG.

Such a move would loosen the families’ grip on the German group in favor of direct ownership of the sports car brand founded by their predecessor Ferdinand Porsche in 1931.

Volkswagen and Porsche SE declined to comment on details of a potential listing, but the automaker said a final decision had not been made and that any deal would have to be approved by management and supervisory boards.

A source said that Volkswagen CEO Herbert Diess provided a blueprint of his IPO plans to representatives of the supervisory board earlier this week after discussions on the matter over the past weekend.

The person said that the supervisory board meeting originally scheduled for Tuesday to discuss the plans has been canceled as many questions remain unresolved.

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(Reporting by Victoria Waldrusy, Miranda Murray, Jan Schwartz, Christoph Stitz, Ilona Weisenbach; Editing by Louise Heavens and Mark Potter

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