UPDATE [20/09/22]: In light of the fact Volkswagen has priced shares between €76.50 and €82.50 ($114.16 and $123.04), the upcoming Porsche IPO is cruising towards a total valuation between €70 billion to €75 billion ($104.4 billion to $111.9 billion) which, believe it or not, is actually the midpoint of analysts’ expectations.
The plan is to dedicate 49% of the funds raised to pay a special one-off dividend to shareholders, while the remaining 51% will be set aside for the coming shift towards electric vehicles and battery technology (both expensive endeavours).
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“The listing will comprise 911 million shares – a nod to the historic car brand’s most famous model – divided into 455.5 million preferred shares and 455.5 million ordinary shares,” explains Mark Sweney of The Guardian.
“Up to 113.8 million of the preferred shares, carrying no voting rights, will be placed with investors in what will be Germany’s second largest initial public offering to date.”
If Porsche does indeed achieve the upper-end valuation, it’ll go down in history as the third-largest European stock market float to date, according to Refinitiv data.
Original Article – Volkswagen Is Pulling The Trigger On A Blockbuster Porsche IPO
Volkswagen Group has confirmed its intention to float revered sports car brand Porsche in the coming weeks by way of IPO, triggering what could become one of the world’s largest-ever listings – eclipsing both Germany and Europe’s largest-ever public debuts – despite unfavourable market conditions (i.e. record inflation, Russia-Europe energy standoff).
According to the Financial Times, Volkswagen’s supervisory board is currently targeting a listing in Frankfurt either towards the end of this month or the beginning of October “subject to further capital market developments.” But sources have told Reuters that the four-week period may be extended, allowing buyers to express interest or pull the plug entirely in the event there’s a disturbing lack of investor interest.
“It would be the technical go-ahead, nothing more. It’s paving the way, but this would not guarantee that the stock market bell will ring in the end,” noted an inside source ahead of the decision.
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So how exactly will this be structured?
“VW – which first revealed in February that it was considering a Porsche IPO – said it would sell 12.5% of the Stuttgart-based subsidiary directly to new investors,” explains Joe Miller of FT.
“Adding that the Qatar Investment Authority – one of VW’s largest shareholders – ‘has expressed strong interest’ in buying almost 2.5% of this tranche.”
The Porsche-Piëch families (Volkswagen’s anchor shareholders) would also purchase another 12.5% of Porsche at a premium of approximately 7.5%; while preferred shares will be offered to retail investors in countries such as France, Spain, and Italy in a bid to “tap into Porsche’s loyal fan base.”
Given its longstanding status as the most profitable of Volkswagen’s ten marques – having recently experienced an increase of operating profits by 22% in H1 2022 whereas the overall VW brand faced an 8% decline – alongside the promising results of its electric Taycan model, analysts have calculated the Porsche IPO could attract a monstrous valuation of €60 billion to €85 billion ($88 billion to $124 billion).
Interesting times.
