business news

Volkswagen aims for $70-75 billion valuation in planned IPO of Porsche

Volkswagen aims for $70-75 billion valuation in planned IPO of Porsche

German automobile manufacturing giant, Volkswagen, is reportedly aiming for a valuation of around €75 billion ($75.1 billion) for Porsche, the luxury sportscar maker, for what will be the second-largest IPO (initial public offering) in German history.

Volkswagen plans to sell the preferred Porsche AG shares at approximately €76.50 to €82.50 euros each, which will result in a valuation of €70 billion to €75 billion ($70 billion to $75 billion).

As per reports, this will be the third largest IPO in Europe. According to Volkswagen, trading will begin on the Frankfurt Stock Exchange on September 29.

More than 911 million of Porsche AG shares would be divided into 455.5 million ordinary shares as well as 455.5 million preferred shares as part of the listing. Besides, throughout the duration of the IPO, up to 113,875,000 preferred shares with no voting rights would be placed with investors.

Volkswagen has added that as cornerstone investors, including mutual fund firm, T. Rowe Price, as well as the sovereign wealth funds of Abu Dhabi, Qatar, and Norway would subscribe up to approximately €3.68 billion worth of preferred shares.

According to Volkswagen's agreement with Porsche SE, its biggest shareholder, 25% and one ordinary share in the brand, with no voting rights, would be going to Porsche SE at the cost of the preferred shares in addition to a 7.5% premium.

In a separate statement, Porsche SE, which is controlled by the Piech and Porsche families, stated that it will finance the ordinary shares’ acquisition with debt capital of around €7.9 billion.

The total outcome from the sale is expected to be between €18.1 billion to €19.5 billion.

If the IPO is successful, Volkswagen plans on calling a shareholder meeting in December to propose to pay 49% of the total proceeds as a special dividend to shareholders in early 2023.

It is expected that a stock exchange prospectus should be published by Monday, following which, both private and institutional investors will be able to subscribe to Porsche shares.

Source credit:

About the author

Meghna Singh

An English Literature graduate, Meghna Singh ventured into the profession of content development to incorporate her knack for writing articles across verticals including technology, healthcare, business, and alike for News Origins and Newsorigins. She has also completed her MBA in Tourism and worked as a content creator in the field of product development.