The carmaker Porsche got off to a good start on the stock market in the midst of a difficult market environment. Shortly after the start of trading on Thursday, the share
of the carmaker by almost 2 percent above the issue price to 84.00 euros, but then slipped back to the level of the issue price in the meantime, only to slowly work its way up again in the course of the morning. “Today this is not exactly a dream environment for an IPO,” said portfolio manager Thomas Altmann from the investment advisor QC Partners. “That makes it difficult to make subscription profits.”
the Preference shares of the parent company Volkswagen
however, fell significantly by 5.5 percent. With proceeds of 9.4 billion euros for Volkswagen, it is the largest German IPO since Telekom in 1996.
“Today, a big dream is coming true for us,” said Porsche CEO Oliver Blume (54) on Thursday at the Frankfurt Stock Exchange, who has also been at the helm of since September Volkswagen stands. VW CFO Arno Antlitz said: “We proved today: Volkswagen can capital market – even in a challenging market environment.” This gives Porsche more entrepreneurial independence to implement its ambitious strategy. At the same time, the Wolfsburg-based group, which retains a majority stake in Porsche, will have more flexibility in financing the transformation into a leading provider of electromobility and digitization, Antlitz continued.
Porsche more valuable than Mercedes-Benz and BMW
Based on the first prize, Porsche achieves a market capitalization of around 76.5 billion euros. This means that the Stuttgarters are more valuable on the stock exchange than Mercedes Benz with around 58 billion euros and bmw with 47 billion euros. The parent company Volkswagen was even higher on Thursday with 86 billion euros.
The issue price per preferred share was EUR 82.50 on Wednesday was set at the upper end of the previously reported range from EUR 76.50 to EUR 82.50 per security. This had already been expected in view of the high demand from investors. A total of almost 114 million preferred shares will be placed. This includes approximately 15 million over-allotment shares.
According to Porsche, the lion’s share of the shares went to large investors. Private investors only received 7.7 percent of the placement volume. Because the offer was oversubscribed, not all private shareholders could have been considered, it said. Four anchor investors, including VW’s major shareholder Qatar, had already secured almost 40 percent of the shares in advance.
Private investors lose out in the IPO
In preparation for the IPO, the share capital of Porsche AG was divided half into non-voting preferred shares and half with voting ordinary shares. A quarter of the assets – about an eighth of all shares – have now gone on sale. In addition, the holding company Porsche SE (PSE) receives 25 percent plus one share of the parent company for a purchase price of 88.69 euros.
The PSE, which is controlled by the Porsche and Piëch families, thus has a blocking minority and influence on important decisions. A total of 10.1 billion euros will flow into the coffers of Volkswagen AG as a result of the deal. PSE intends to finance the majority of the purchase price with outside capital. The listed in the Dax share
the PSE temporarily fell by 9 percent on Monday.
Among other things, Volkswagen intends to use the proceeds to invest billions in electromobility and finance digital. Almost 49 percent of the proceeds could go to the VW shareholders – an extraordinary general meeting is to vote on this in December. Also the VW employees in the house tariff and in Saxony waving a bonus of 2000 euros. Porsche has not yet officially announced the amount of a possible bonus for employees.
The people of Stuttgart hope that going onto the floor will take them a step towards more independence again. In 2008/2009, the Stuttgart-based company tried to take over VW – that failed and the Lower Saxony company swallowed up the sports car manufacturer. Since then, Porsche has been considered a pearl of return in the VW Group.
Porsche not an “icebreaker” for further IPOs
While Porsche shares rushed into investors’ portfolios on Thursday, some strategists are already looking ahead. Is the spectacular IPO good as a catalyst or “icebreaker” for further IPOs Germany and Europe? Investment bankers had hoped so.
But other stock market candidates in Porsche’s slipstream are hardly in sight given the economic fears and the stock market slump. “One transaction alone cannot open the floodgates. This would require better macroeconomic forecasting and less stock market volatility,” said Antoine de Guillenchmidt, co-head of the equity transactions (ECM) business Goldman Sachs. Despite the 9.4 billion euro record issue by Porsche, a black year threatens for IPOs.
Have across Europe IPOs raised just $4.5 billion so far this year. In the third quarter, companies raised just $8 billion from new issues, capital increases and share placements combined, according to data from Refinitiv – an all-time low. With Porsche AG alone, more than nine billion dollars are added.
Only a few IPOs to be expected
“Porsche has completely decoupled itself from the negative market trend”
“Porsche has completely decoupled itself from the negative market trend,” marvels a well-known automobile banker. But that is the reason why the IPO does not encourage other candidates. They lack the attraction and fascination that the Volkswagen subsidiary exerts with its coveted products and wealthy, and therefore economically insensitive, customer base. “The positive response from investors to Porsche certainly helps with the mood, but will not necessarily ensure more activity in the near future,” agrees Martin Thorneycroft of Morgan Stanley.
Lawrence Jamieson, Head of ECM Europe at Barclays, expects at most three IPOs in Europe by the end of the year: “These are all larger, liquid, more defensive stocks that have been in the starting blocks for some time and the preparations over the summer are not quite there have set.” Companies such as the Swiss skin care group Galderma, owned by the financial investor EQT, and Mecalux, a Spanish manufacturer of storage systems, are actually ready for an IPO, but are waiting for a better environment. A window in 2022 could only open for prime contenders, or those who can come up with a good reason for going public now, says Bank of America’s Thorsten Pauli.
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Germany regularly becomes the hydrogen subsidiary of thyssenkrupp, Nucera, named as a promising candidate. The Italian Nucera minority shareholder De Nora went public in the spring despite adverse circumstances. But Thyssenkrupp is hesitating: In principle, this is still the first choice, but the “capital market environment is currently rather unfavorable for a quick IPO,” it said last week. That’s how it is for many companies. “They know it will take patience and wait until 2023 — or look for alternatives,” said Suneel Hargunani of Citi.