Volkswagen seeks to drive through market gloom with Porsche IPO

Volkswagen has decided to push ahead with its plan to list a minority stake in the Porsche sports car maker this year despite gyrating markets, paving the way for what could be one of Europe’s biggest initial public offerings.

The manufacturer is planning the initial public offering (IPO) at the end of September or beginning of October, subject to further developments in capital markets, VW said in a statement on Monday, following a meeting of its supervisory board. Europe’s biggest carmaker is planning to finalise the listing by the end of the year.

“This is a historic moment for Porsche,” VW and Porsche chief executive Oliver Blume said. “We believe that an IPO would open a new chapter with greater independence for us as one of the world’s most successful sports car manufacturers.

With the share sale, the billionaire Porsche and Piëch clan is set to regain direct influence over what used to be its family enterprise, some 13 years after they were forced to sell the sports car business to Volkswagen. More than a decade ago, Porsche Automobil Holding tried to take over control at the much larger Volkswagen, but the bold move failed when funding dried up during the financial crisis.

While more sway over Porsche is on the cards for the family, VW hopes to yield funds that will help bolster its ambitious investment plans in electric models and groundbreaking new digital features. The plan is contending with some of the most challenging market conditions in years where a slowing economy, rampant inflation and surging energy costs have largely brought public listings to a standstill.

Investors will be able to purchase preferred shares in Porsche that do not carry voting rights, while the family, which holds a 53 per cent voting stake in Volkswagen through its investment firm Porsche Automobil Holding, is set to buy a blocking minority stake of 25 per cent plus one share. The remaining voting stock will stay with Volkswagen.

Even as markets gyrate, Porsche has lined up investor interest for its IPO at a valuation of as much as €85 billion, people familiar with the matter told Bloomberg News last month. The maker of the 911 sports car and the electric Taycan has secured pre-orders that exceed the shares on offer at a valuation between €60 billion and €85 billion, said the people, who asked not to be identified as the discussions are private.

Big-name investors including T Rowe Price Group Inc. have already indicated interest in subscribing to the IPO in that valuation range, the people said. On Monday, VW said Qatar Investment Authority plans to buy a 4.99 per cent stake subject to a cornerstone investment agreement. Porsche has also been gauging interest from billionaires including the founder of energy drink maker Red Bull, Dietrich Mateschitz, as well as LVMH chairman Bernard Arnault, according to the people.

VW plans to offer Porsche’s preferred shares also to retail investors in countries including Germany, Austria, Switzerland, France, Spain and Italy, the company said on Monday, confirming an earlier Bloomberg News story.

— Bloomberg