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A Direct Stake In Potential Porsche IPO Being Considered By Porsche, Piech Families: Reports

A Direct Stake In Potential Porsche IPO Being Considered By Porsche, Piech Families: Reports
If the luxury carmaker Porsche AG comes to decide to separately listed on a stock exchange, a direct stake in the luxury car maker could be taken by the Porsche and Piech families, who control Volkswagen's largest shareholder said reports quoting sources with knowledge of the matter.
If that happens, the grip of the family in the Europe's largest carmaker Volkswagen and would move towards direct ownership of the iconic sports car brand that was founded by the ancestor of the family Ferdinand Porsche way back in 1931.
There were reports earlier this year about the speculations of a listing of the unit that also included estimates of the valuation of the standalone Porsche AG unit in the range of between 45 billion to 90 billion euros ($55 billion-$110 billion) whereas the valuation of the entire Volkswagen group was 135 billion.
According to reports quoting sources, Volkswagen is continuing to consider scenarios for a listing even while the sources said that a possible initial public offering (IPO) for Porsche AG was not high on the agenda for the German auto group. However the sources noted that the biggest obstacle for the listing of Porsche was the complex stakeholder set-up of VW.
The complex nature of stakeholder set-up of VW was carefully made up after the failed acquisition of Volkswagen by Porsche in 2009 and resulted in the well-known brand was acquired by Volkswagen while the Porsche and Piech families turned out to be the most influential investors of VW.
The reports also quoted the sources as saying that Volkswagen had not yet taken any decision over whether to get Porsche AG listed as a separate entity and there is no assurance that it would actually take place.
Currently the two families are owners of all the ordinary shares of Porsche Automobil Holding SE which in turn is the owner of more than half of the voting rights in Volkswagen as well as a 31.4 per cent equity stake in the company.
There were no comments on the issue from Porsche Automobil Holding and Volkswagen.
Stifel analysts say that the only way for the families to gain direct ownership in the namesake brand while managing to keep out activist investors is to sell some voting rights in Volkswagen to co-shareholder Lower Saxony which has a 20 per cent voting stake.
"We believe this scenario would satisfy all parties," the analysts of Stifel wrote. They added that Lower Saxony would have a blocking minority while the families would regain some control of Porsche AG and the unions would be happy that this will bring in cash flow into the unit.
The Volkswagen’s current cash flow was sufficient to fund an ambitious turnaround and to transform the company to become the largest maker of electric vehicles of the world, said the company’s Chief Executive Herbert Diess when asked about a possible listing earlier this month.

Christopher J. Mitchell

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