Volkswagen is beginning a landmark Porsche IPO plan, fighting market doubts

September 7, 2022: -On Monday, Volkswagen announced its intention to float sports car brand Porsche, triggering what could become one of the planet’s most extensive listings even as record inflation and a Russia-Europe energy standoff have sent European stocks tumbling.

The carmaker published a known intention to float for an initial public offering in September or October to be completed by the year’s end but added that the listing and timing were “subject to further capital market developments.”

On Tuesday, Sources close to the negotiations told Reuters that Volkswagen might extend the four weeks for buyers to express interest or pull its plans altogether, should investors not show enough enthusiasm to make a move worthwhile.

“It would be the technical go-ahead, nothing more,” one of the sources said ahead of the decision. “It’s paving the way, but this would not guarantee that the stock market bell will ring in the end.”

Investors expect a valuation between 60 billion and 85 billion euros. While the Porsche brand is strong, valuations of other luxury carmakers such as Aston Martin and Ferrari have fallen.

At the high end of estimates, the IPO could be among the largest in German history and the huge in Europe since 1999, Refinitiv data showed.

Qatar will be a cornerstone investor who intends to commit to a 4.99% stake in the newly listed company.

Preferred shares will be offered to retail investors in European countries, including France, Spain, and Italy, to tap into Porsche’s loyal fan base.

Volkswagen also approved a 25% plus one share of ordinary shares in Porsche AG to be marketed to Porsche SE, giving the controlling Porsche and Piech families a blocking minority and bolstering their push for a tighter leash on the carmaker.