Porsche launches Europe’s biggest joint-stock company in a decade: but cost cuts threaten to set back £65bn carmaker’s hopes

Volkswagen is pushing ahead with a massive listing of Porsche on the stock market despite investor jitters caused by economic turmoil in Europe.

The carmaker hopes to give Porsche a market valuation of between £61bn and £66bn, with bidding to begin in Frankfurt at the end of the month.

It will be the largest listing in Europe for more than a decade and the second largest in German history as Porsche seeks to raise £8.3 billion in an initial public offering (IPO).

Listing: Porsche hopes to attract a market valuation of £61bn-£66bn, with bidding to start in Frankfurt at the end of the month

The chunky float comes at a time of turmoil with rampant inflation, rising interest rates and an energy crisis.

The uncertainty has made investors wary of throwing their money into companies going public.

But Porsche’s rate could give a boost to the European stock market after a quiet year. Arno Antlitz, Volkswagen’s chief financial officer, said: “We have now joined forces with Porsche and welcome the commitment of our cornerstone investors.”

The sovereign wealth funds of Qatar, Abu Dhabi and Norway, as well as investment house T Rowe Price, have committed to buy Porsche shares for a total of up to 3.2 billion pounds.

Volkswagen plans to offer 25 percent of Porsche’s so-called “preferred” non-voting shares to investors. That would raise up to £8.3bn at a share price of between €76.50 (£67.07) and €82.50.

The similarly named Porsche SE, Volkswagen’s largest shareholder, controlled by the billionaire Porsche-Pich family, will buy 25 percent plus one of the “ordinary” voting shares.

The company has committed to pay the IPO price plus a 7.5 percent premium, which will raise another 8.9 billion pounds for Volkswagen. The deal will return control to the Porsche-Piech family of industrialists after more than a decade.

Their influence has raised concerns in management, as has the fact that Volkswagen boss Oliver Blume will remain as Porsche chief executive.

In total, Volkswagen plans to raise up to 17.2 billion pounds from the IPO and plans to distribute 49 percent of it to its shareholders through a special dividend.

The company will spend the rest on increasing the production of electric cars and investing in software, the report added.

With money raised from dollar investors, Porsche’s $9.4 billion listing would be the biggest since Glencore raised $10 billion in 2011 – almost double what companies have raised in IPOs this year .

With a market capitalization of £66 billion, Porsche would be worth almost as much as its entire parent company, Volkswagen.

https://www.dailymail.co.uk/money/markets/article-11228217/Porsche-kicks-Europes-biggest-float-decade.html?ns_mchannel=rss&ns_campaign=1490&ito=1490

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