After Deutsche Telekom has Porsche on Thursday the second largest IPO in German economic history. The first price of the preferred share on the Frankfurt Stock Exchange was 84 euros, then the tremors began. The paper from the Stuttgart sports car manufacturer fell back to the issue price of 82.50 euros, but finally took off and climbed by up to five percent to 86.76 euros.
The shares could be subscribed to until Wednesday afternoon. After the end of the subscription period, the company announced that it had issued a total of 113.9 million preferred shares at a price of EUR 82.50 – at the upper end of the range. Porsche AG thus has a market value of 75 billion euros.
This results in an issue volume of 9.4 billion euros when the paper is sold. So far, only Telekom has raised more money by going public in 1996 with 9.65 billion euros. The actual income of around 19.5 billion euros from the IPO is more than twice as high for Volkswagen. The reason for this is that with the IPO, 25 percent of Porsche’s ordinary shares will also go to Porsche-Automobil Holding, which is controlled by the Porsche and Piëch families.
Heavyweight on the floor
The investment holding in turn holds more than 53 percent of the ordinary shares in the Volkswagen Group. The IPO gives the owners direct access to the Porsche Group again. They had lost that with the failed takeover of the VW Group by the small sports car manufacturer around ten years ago.
Finally a lot going on on the floor in Frankfurt. Porsche is the only noteworthy IPO of the year
Half of the money is to remain in the Volkswagen Group to finance the transformation towards electromobility with simultaneous digital networking. 49 percent of the proceeds are to flow to Volkswagen shareholders in the form of a special dividend.
So far, Porsche is one of twelve brand subsidiaries in the Volkswagen Group – and by some distance the most valuable; it is not only regarded as the earnings pearl of the group. But it will also be a heavyweight on the stock exchange from Thursday. The sports car manufacturer starts its stock market career with a market value of around 75 billion euros. For comparison: Volkswagen itself is worth around 85 billion euros on the floor. Mercedes-Benz is valued at 58 billion, BMW is almost 48 billion.
Private investors get something too
In preparation for the IPO of Porsche, Volkswagen divided the share capital into 50 percent common shares and 50 percent preferred shares. Ordinary shares carry voting rights, while preference shares often pay higher dividends. Investors can buy up to 25 percent of Porsche preference shares. In addition to large institutional anchor investors such as the Qatari sovereign wealth fund QIA, a holding company from Abu Dhabi and the Norwegian sovereign wealth fund, private investors can also get a chance.
Lined up cars of the sports car manufacturer Porsche in front of the Frankfurt Stock Exchange
Porsche expects more independence from going public. Outside of the Volkswagen group structures, it is hoped that the group will be more visible and more flexible. This IPO at the latest proves that Porsche is now likely to shine more independently – in the midst of a difficult stock market environment. The stock markets have been falling for weeks because high inflation and fears of a recession are keeping trading firmly under control. Therefore, some observers consider the leap onto the trading floor to be daring at this point in time.
Oliver Blume’s dual function raises additional questions. At the same time, the Porsche boss has also become the new boss of the Volkswagen Group. Observers fear that both roles are not compatible with each other. Such concerns are not shared at Volkswagen and Porsche. The Volkswagen Group says it is well prepared for cases in which potential conflicts of interest could arise.
The article was published on 29.9. updated.
