Volkswagen will price shares in Porsche at between €76.50 and €82.50, the German group announced on Sunday, leading to a partial IPO that would put a value on the historic sportscar brand of €70bn-€75bn, in the middle of the range of analysts’ expectations.
The flotation of 12.5 per cent of Porsche, planned for September 29 in Frankfurt, will deliver €8.7bn-€9.4bn to the marque’s parent company. VW has said it will use almost half of the proceeds to pay a one-off special dividend, while the remaining funds will be deployed to help the carmaker pay for the transition to battery technology.
Roughly €3.8bn worth of shares have been earmarked for a combination of backers: the Qatar Investment Authority and a big VW shareholder that intends to acquire almost 2.5 per cent of Porsche, along with Norges Bank, T Rowe Price, the investment firm, and ADQ, the Abu Dhabi sovereign fund. The last three have committed to subscribe for non-voting shares worth €750mn, €750mn and €300mn, respectively.
“We are now in the home stretch with the IPO plans for Porsche and welcome the commitment of our cornerstone investors,” said VW chief financial officer Arno Antlitz.
As part of the partial IPO, which would become one of the largest European offerings, the Porsche-Piëch families, who are VW’s anchor shareholders, will buy a further 12.5 per cent of Porsche, at a premium of 7.5 per cent on the price of the shares offered to the general public. The families’ tranche will carry voting rights.
Depending on the final offer price for the IPO, the proceeds from the sale of shares to the Porsche-Piëch clan — who lost direct control of their patriarch’s company when VW bought Porsche in a reverse takeover in 2012 — will bring in a further €9.4bn-€10bn. Almost half of this will go towards a special dividend to Volkswagen shareholders, including the families.
Porsche SE, the Porsche-Piëch investment vehicle, said it would finance the acquisition of its Porsche shares with debt capital of up to €7.9bn.
Analysts had calculated that the long-awaited Porsche IPO could achieve a valuation for the profitable brand of €60bn-€90bn. However, bankers working on the flotation said the offering would be subject to a “corporate governance discount” of 30-40 per cent, with investors balking at the complexity of VW and Porsche’s ownership and management structures.
The recent replacement of Volkswagen chief executive Herbert Diess with Porsche boss Oliver Blume, who will maintain both roles, also raised concerns among shareholders. They questioned whether the arrangement would derail VW’s stated goal of giving the 911-maker more “entrepreneurial freedom” through the IPO.
A full prospectus is scheduled to be published on September 19.