The Volkswagen logo on the Porsche headquarters: The Wolfsburg parent company clears the way for the Stuttgart sports car manufacturer towards the stock exchange.
(Photo: dpa)
Dusseldorf The planned IPO of Porsche takes the next hurdle: On Thursday evening, the Volkswagen supervisory board passed the fundamental resolution with which all the necessary preparations for the IPO project can be made. This applies above all to legal issues and cooperation with investment banks. However, this is not yet a guarantee that the IPO will actually take place.
“The actual feasibility of an IPO depends on a large number of different parameters as well as the general market conditions,” said the Volkswagen Group in the evening. Final decisions, precisely what the timing of an IPO includes, have not been made. As the company also said, Volkswagen is probably aiming for the planned IPO by the end of the year. However, geopolitical crises such as the Ukraine war could still upset the Volkswagen schedule.
On Tuesday, Volkswagen had already announced that the Wolfsburg-based group had negotiated a key agreement with Porsche SE “which should form the basis for further steps in preparation for a possible IPO”. Porsche SE – not to be confused with the sports car manufacturer Porsche AG, whose IPO is now being prepared – is the Stuttgart holding company in which the Porsche-Piëch family has bundled its shares in the VW group. The family holds 53 percent of VW voting rights, making it the most influential shareholder in Wolfsburg.
The executive and supervisory boards of Volkswagen and Porsche SE approved this agreement in the evening. This means that the VW Group can now decisively advance the stock market plans for its Stuttgart sports car subsidiary. The cornerstone agreement also guarantees the Porsche-Piëch family a significant influence at Porsche AG.
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Family should get blocking minority
In the event of an IPO, the framework agreement provides for the share capital of Porsche AG to be divided into 50 percent preference shares and 50 percent ordinary shares. An additional capital increase is therefore not planned. As part of the possible IPO, up to 25 percent of the non-voting preference shares will then be placed on the capital market.
Porsche SE – ultimately the family – is to receive an additional 25 percent plus one share of Porsche AG ordinary shares (with voting rights). The family would then have a blocking minority and, despite the comparatively small share in the share capital, could exert a significant influence on the sports car subsidiary. Porsche SE is to receive the ordinary shares at the placement price of the preference shares plus a premium of 7.5 percent.
>> Read also: The Freischwimmer – How Oliver Blume releases Porsche from the VW Group
The Volkswagen Group retains 75 percent each of the ordinary and preference shares and thus also 75 percent of the share capital. This means that the Wolfsburg car manufacturer can fully consolidate its Stuttgart subsidiary in the consolidated financial statements even after the IPO has been completed. It is also planned to continue the industrial cooperation with Porsche after the IPO, added Europe’s largest car company. Volkswagen wants to use the billions in proceeds from the IPO for its own transformation with electrification and digitization.
It was also agreed that Volkswagen would distribute a special dividend to shareholders in the event of a successful IPO. This special dividend is expected to represent 49 percent of the proceeds from the IPO of the preferred stock and the sale of the common stock. Porsche SE in particular would benefit from this, as it could use these billions to buy most of the ordinary shares in Porsche AG.
At the same time, it is planned that all Volkswagen employees will benefit from the Porsche IPO. Every VW employee is to receive 2,000 euros as part of an employee participation program.
Going public should above all raise the hidden value of the Stuttgart sports car manufacturer. The entire Volkswagen Group currently has a market capitalization of a good 100 billion euros. Porsche alone could be worth at least 50 to 60 billion euros, in the best case maybe even up to 100 billion euros, the company said.
After an IPO, the owner family would regain access to Porsche AG, which had gone completely to Volkswagen after the lost takeover battle ten years ago. The family still has a strong emotional bond with the sports car manufacturer because it forms the core of their automotive empire.
“We welcome the step taken by the Volkswagen Group. Porsche is a strong brand with a robust business model and a worldwide fan community,” said Porsche CEO Oliver Blume after the decision of the supervisory board.
“An IPO of Porsche AG would give us additional flexibility to further accelerate the transformation. Porsche AG would have more entrepreneurial freedom and at the same time would continue to benefit from group synergies,” stressed Volkswagen CEO Herbert Diess.
The employee side on the VW supervisory board supports the stock market plans for Porsche. “In our view, restructuring can take place if the perspectives for the employees are right and things are designed sustainably in the interests of the workforce,” said Daniela Cavallo, Chairwoman of the VW Works Council. These conditions are given at Porsche.
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