Porsche kicks off Europe’s biggest float in a decade: But costs crunch threatens to slam brakes on car-maker’s £65bn hopes
Volkswagen is pushing ahead with the huge stock market listing of Porsche – despite investor jitters caused by Europe’s economic turmoil.
The car-maker is hoping that Porsche will attract a market valuation of £61-66billion, with trading to start in Frankfurt at the end of the month.
It will be Europe’s largest listing in more than a decade, and the second-largest in German history, as Porsche aims to raise £8.3billion in the initial public offering (IPO).
Listing: Porsche is hoping to attract a market valuation of £61-66bn, with trading to start in Frankfurt at the end of the month
The chunky float comes at a time of upheaval with red-hot inflation, rising interest rates and an energy crisis.
Uncertainty has caused investors to be wary of throwing their money at companies coming to market.
But the Porsche float could kick-start Europe’s stock market after a quiet year. Arno Antlitz, Volkswagen’s chief financial officer, said: ‘We are now in the home stretch with Porsche and welcome the commitment of our cornerstone investors.’
Qatar, Abu Dhabi and Norway’s sovereign wealth funds, and investment house T Rowe Price, have committed to buying a total of up to £3.2billion worth of Porsche’s shares.
Volkswagen plans to offer 25 per centof Porsche’s so-called ‘preferred’ shares, which do not carry voting rights, to investors. This will raise up to £8.3billion, with the stock priced between €76.50 (£67.07) and €82.50.
The similarly named Porsche SE, Volkswagen’s largest shareholder, which is controlled by the billionaire Porsche-Piech family, will buy 25 per cent plus one of the ‘ordinary’ shares, which do carry voting rights.
It has committed to pay the IPO price plus a 7.5 per cent premium, which will rake in up to another £8.9billion for Volkswagen. The deal will hand back control to the Porsche-Piech industrialist family after more than a decade.
Their influence has triggered governance concerns, as has the fact that Volkswagen boss Oliver Blume will stay on as chief executive of Porsche.
In total, Volkswagen is set to bag up to £17.2billion from the IPO, and plans to dole out 49 per cent of this to its shareholders through a special dividend.
The company will spend the remainder on boosting its electric car production and investing in software, it added.
Through money raised from investors in dollars, Porsche’s $9.4billion listing would be the largest since Glencore raked in $10billion in 2011 – almost double the amount which companies have raised in IPOs this year.
At a market cap of £66billion, Porsche would be worth almost as much as its entire parent company Volkswagen.