(Bloomberg) — Volkswagen AG is seeking to raise up to 9.4 billion euros ($9.41 billion) from the initial public offering of its iconic sports car maker Porsche AG in Europe’s biggest listing in more than a decade.
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The German carmaker said late on Sunday that it is seeking a valuation of 70 billion to 75 billion euros for the listing, below an earlier final target of up to 85 billion euros, with the deal going ahead at a very tight time. -large in the market. European markets have been largely closed for most of the year, with investors shying away from IPOs due to the region’s energy crisis, rising interest rates and record inflation.
Amidst the stock market slump, the plan to list is getting a boost from the firm commitments of the cornerstone investors. The Qatar Investment Authority, Norway’s sovereign wealth fund, T. Rowe Price and ADQ are set to subscribe to preference shares of up to 3.7 billion euros, the manufacturer said. Porsche isn’t the only one scaling back valuation targets, with Intel Corp. lowering expectations for its Mobileye IPO.
“We are now in the home stretch with the IPO plans for Porsche and we welcome the commitment of our cornerstone investors,” said Arno Antlitz, VW’s Chief Financial Officer.
The offer period will start on September 20th with a planned start of trading on September 29th.
As well as offering investors a piece of one of the most recognizable names in motoring, the IPO will return significant decision-making power to the Porsche-Piech family, which lost control of the sports car maker more than a decade ago after a long period. takeover battle with VW. To account for the interests of the billionaire family, which owns 53% of VW’s voting shares through the separately listed Porsche Automobil Holding SE, the Porsche IPO is complicated and has prompted governance concerns similar to those about VW’s complex structure.
Investors will be able to subscribe to 25% of Porsche’s preferred shares, which have no voting rights. The family will buy 25% plus one of Porsche’s common shares with voting rights, meaning they will get a minority blocking stake and influence on key future decisions. The family has agreed to pay a 7.5% premium over and above the price range for the preferred shares and plans to finance the acquisition with a combination of debt capital of up to 7.9 billion euros and a special dividend paid out by VW .
Proceeds from the deal will help VW fund the transition to electric vehicles and investments in software, the automaker says.
While there is a lot of interest in the IPO, some investors have said the appointment of Oliver Blume, Porsche’s chief executive, at the helm of VW and the plan for him to remain in both roles raises questions about Porsche’s future independence.
(Updates with CFO’s comment in the fourth article)
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