Porsche launches Europe’s biggest float in a decade: but cost crisis threatens to dampen carmaker’s £65billion hopes
Volkswagen is pushing ahead with Porsche’s huge IPO – despite investor jitters caused by economic turmoil in Europe.
The automaker hopes Porsche will attract a market valuation of £61-66 billion, with trading due to begin in Frankfurt at the end of the month.
It will be the biggest listing in Europe for over a decade and the second biggest in German history as Porsche aims to raise £8.3bn in the IPO. ).
Listing: Porsche hopes to attract a market valuation of £61-66bn, with trading due to start in Frankfurt at the end of the month
The big float comes at a time of turmoil with runaway inflation, rising interest rates and an energy crisis.
The uncertainty has made investors wary of throwing their money at companies that come to market.
But Porsche’s flutter could revive the European stock market after a quiet year. Arno Antlitz, chief financial officer of Volkswagen, said: “We are now in the home stretch with Porsche and welcome the commitment of our main investors.”
Sovereign wealth funds from Qatar, Abu Dhabi and Norway, as well as investment firm T Rowe Price, have pledged to buy up to £3.2 billion worth of Porsche shares.
Volkswagen plans to offer investors 25% of the so-called “preferred” shares of Porsche, which do not carry voting rights. This will net up to £8.3 billion, with the share price ranging between €76.50 (£67.07) and €82.50.
The Porsche SE of the same name, the main shareholder of Volkswagen, controlled by the billionaire Porsche-Piech family, will buy 25% plus one of the “ordinary” shares, which carry voting rights.
He has pledged to pay the price of the IPO plus a 7.5% premium, which will earn Volkswagen up to £8.9bn more. The deal will return control to the Porsche-Piech family of industrialists after more than a decade.
Their influence has raised governance concerns, as has the fact that Volkswagen boss Oliver Blume will remain as Porsche chief executive.
In total, Volkswagen is expected to pocket up to £17.2 billion from the IPO and plans to distribute 49% of it to its shareholders through a special dividend.
The company will spend the rest to increase production of electric cars and invest in software, he added.
Thanks to money raised from dollar investors, Porsche’s $9.4 billion listing would be the largest since Glencore raised $10 billion in 2011, nearly double the amount the companies have raised in IPOs this year.
With a market capitalization of £66 billion, Porsche is said to be worth almost as much as all of its parent company Volkswagen.