VW to offer only non-voting shares to public in €20bn Porsche listing


Volkswagen’s planned Porsche market will only offer shares without a vote to the public in a move that threatens to disgrace what could become one of Germany’s largest listings, and achieve around € 20 billion.

The German automaker has confirmed that it has “concluded a framework agreement” that creates two types of shares and reflects the corporate governance structure of the company itself, which has come under heavy criticism.

The deal with its largest shareholder, the Porsche-Feich family investment tool, will include a transfer of only 12.5% ​​from the major sports car brand on the open market, leaving the two companies in control.

The partial initial public offering can be made as early as October, Volkswagen from Wolfsburg added.

Arno Antelitz, Volkswagen’s CFO, called the program a “winning situation for all our stakeholders”, referring to Volkswagen’s strong German workers’ committee and the company’s leading shareholders, which include the Porsche-Fich families and the German state of Lower Saxony.

CEO Herbert Dis said the move would give Porsche, which accounts for about a quarter of Volkswagen’s annual profits and made a breakthrough in the electricity market, greater “entrepreneurial freedom.”

Proceeds from the offering will give VW “additional flexibility to further accelerate the transformation” of electric vehicles, analysts said.

Under current plans, Porsche’s share capital will be split in two, producing two types – ordinary voting shares and non-voting preference shares.

The Porsche-Fich family’s investment tool will then buy just over 25% of the voting stock at a 7.5% premium to the issue price, and regain a direct grip on the historic legacy the family was forced to give up to Volkswagen in 2012 after a failed takeover attempt following the financial crisis.

An additional 25% of the non-voting preference shares will be offered to the market, and Qatar’s sovereign wealth fund, a current shareholder of Volkswagen, aims to “become a strategic investor in the preferred shares of Porsche AG as a natural extension of the existing relationship,” the company said.

Goldman Sachs advised on the structure of the deal, Antlitz added.

Despite the limited free float, it appears that Volkswagen is expected to raise at least € 20 billion from the offering at a value of around € 90 billion for the entire Porsche. That amount will surpass some of the biggest public offerings in recent years, including electric car maker Rivian’s $ 12 billion Nasdaq 2021 debut.

Given its consistently high profit margins, “the attraction of holding a direct stake in Porsche almost guarantees success,” said Philip Hutchois, a car analyst at Jeffries. “But the preconditions are still subject to approval by Volkswagen and [Porsche SE] The board of directors raises concerns of the administration. “

Volkswagen has said it intends to spend 49% of its revenue on a special dividend, much of which will help fund the acquisition of Porsche SE’s regular voting shares.

The company said it would also distribute a one-time bonus of 2,000 euros to some 130,000 German workers, reassuring unions that actually control the company’s board.

The remaining profits could be used to fund some of Volkswagen’s six planned battery plants, the company said. However, he reiterated that its current ambitions can be funded, which include a € 52 billion investment in electric vehicles and € 30 billion in software through existing free cash flow.

Volkswagen warned that “the possibility of an IPO depends on a number of different parameters as well as general market conditions”, and “no final decisions have been made”.

VW to offer only non-voting shares to public in €20bn Porsche listing Source link VW to offer only non-voting shares to public in €20bn Porsche listing

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