VW defends Porsche IPO timing and structure

Volkswagen has defended the long-anticipated Porsche brand listing structure and timing, as it seeks to reassure investors against corporate governance concerns and the bleak economic environment.

There’s a lot of capital in the market and we think the Porsche IPO could be an icebreaker. . . and show what’s possible,” Porsche chief executive Oliver Blume, who also took over as boss of VW earlier this month.

Blume’s comment comes later VW It was confirmed late on Monday that it intends to transfer a small portion of Porsche’s shares, with retail investors being offered only non-voting shares.

The group said it aims to take its most profitable subsidiary public in Frankfurt by the end of this month or in early October, unless market conditions change significantly.

It sent shares of VW up 3% mid-afternoon Tuesday in Frankfurt.

Bankers involved in the transaction say investor interest has so far been only at a valuation of close to 80 billion euros, the highest of analysts’ estimates.

If achieved, that would value Porsche’s initial public offering at around 10 billion euros, just after Deutsche Telekom’s $13 billion initial public offering in 1996 in its list of major brands. Germany’s largest stock exchange.

However, the slim scale of the uprising, which involved the sale of just 12.5% ​​of the sports car maker’s stake as well as governance concerns following Blume’s appointment as VW boss, was not well received by regulators. well-received investors, according to two people familiar with the discussion.

Porsche initially touted the IPO in part as a roadmap to “strengthen corporate independence” for the Stuttgart-based brand and said it would have more autonomy as profits would no longer be transferred to VW.

Months later, former VW chief executive Herbert Diess was unexpectedly opposed by shareholders and unions, leading to Blume’s appointment that would hold both roles even after the IPO was completed.

In my role as CEO of the Volkswagen Group, I will simultaneously work to ensure that synergies continue to exist in both directions in terms of sales volume, components, technology or planning.” Blume said Tuesday.

He added: “If a conflict of interest arises, we will seriously separate the issues, stressing that while VW and Porsche “have common interests”, the Porsche board of directors does will always make “independent decisions”.

VW CFO Arno Antlitz has defended the structure of the share sale plan, which will involve only 10% of Porsche shares offered after VW’s Qatar shareholder takes 2.5%, with almost half the IPO amount is paid as a special dividend.

“This is the best of both worlds,” Antlitz said Monday. “Between the IPO and the spin off is half-way there, and in our view very well balanced.”

As part of the transaction, VW will split Porsche’s equity in two and allow the Porsche-Piëch family that controls VW to purchase 25% of the voting shares.

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