the Porsche AG is scheduled to go public on September 29. From then on, the Volkswagen-subsidiary from Stuttgart will in all likelihood have some of their preferred shares traded freely on the financial market. This was decided by the board of directors and the supervisory board of the VW Group after meetings on Sunday evening. With the market capitalization of the sports car manufacturer, a value of between 70 billion euros and 75 billion euros is targeted and thus at the lower end of expectations. The VW preferred share buckled slightly on Monday morning.
The company valuation results from the price range for the non-voting Porsche preferred shares, which the previous sole owner Volkswagen set at between 76.50 and 82.50 euros, as he announced after the supervisory board meeting. With the IPO, VW can take in 8.7 to 9.4 billion euros, the VW major shareholder Porsche SE, controlled by the Porsche and Piech families, buys ordinary shares for a further 9.4 to 10.1 billion euros.
Within the price range, Porsche would be the largest IPO in Germany for more than 25 years. 1996 had the Deutsche Telekom according to data from the financial service provider Refinitiv, the equivalent of 9.65 billion euros. The shares can be subscribed from Tuesday to September 28th. A day later, VW and Porsche boss Oliver Blume (54) wants to celebrate the initial listing of Porsche AG on the Frankfurt Stock Exchange. “We are now on the home stretch with the Porsche stock market plans,” said VW CFO Arno Antlitz (52).
For the start of the stock exchange in Frankfurt, the Wolfsburg-based company and the umbrella company Porsche SE (PSE) had previously generally aimed for the end of September or the beginning of October. A specific day was initially not mentioned – the decision to go onto the floor was still subject to change due to the tense global economic situation.
Anchor shareholders want almost 40 percent of Porsche shares
Volkswagen’s plan provides for the capital of Porsche AG to be divided equally between ordinary shares and non-voting preference shares. Volkswagen intends to place up to 12.5 percent of Porsche’s share capital with investors in the form of non-voting preferred shares, which corresponds to 25 percent of the preferred shares. The Wolfsburg-based company already has firm commitments for almost 40 percent of them: In addition to the Emirate of Qatar, which also has a stake in Volkswagen, the Norwegian sovereign wealth fund (Norges Bank) and the investors T. Rowe Price and ADQ want to subscribe to Porsche shares. Anchor shareholders like you facilitate an IPO. The Qatari state holding company QIA alone intends to spend up to 1.9 billion euros on this.
Porsche SE, whose ordinary shares are held by the Porsche and Piech families, intends to acquire 25 percent plus one of the voting ordinary shares in Porsche AG in two steps: 17.5 percent with the IPO, a further 7.5 percent if VW pays the promised special dividend from the proceeds of the issue – probably at the beginning of 2023. The 25 percent of the ordinary shares that will go to Porsche SE also correspond to 12.5 percent of the share capital. Porsche SE holds almost 32 percent of VW, but has the majority of the voting rights. With the entry, the descendants of the Porsche founder regain direct access to the earnings pearl that they lost to Volkswagen after the takeover battle ten years ago. The price for this is based on the issue price for the preferences – with a premium of 7.5 percent. For this, the Porsche Holding is willing to borrow up to 7.9 billion euros.
Overall, the Porsche partial sale could flush 18.1 to 19.5 billion into VW’s coffers. The IPO “would give Volkswagen additional financial flexibility, thereby helping to accelerate industrial and technological transformation,” the auto giant said. However, Volkswagen wants to keep 75 percent minus one share in Porsche AG in order to be able to continue to use the group advantages with the high-yield subsidiary.
VW shareholders can expect nine billion euros as a special dividend
49 percent of the total proceeds – nine billion euros or more – 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. In addition to the family owners and the QIA, the state of Lower Saxony would also benefit from this.