German car manufacturer Volkswagen plans to raise €9.4 billion in an initial public offering (IPO) of Porsche at a valuation of €70-75 billion. The IPO, scheduled for late September, could become the largest in the European market in more than a decade!
Volkswagen targets 75 billion euro valuation in landmark Porsche IPO
Volkswagen ($VOWG) will price preferred shares in the flotation of Porsche AG at 76.50 euros to 82.50 euros per share, the carmaker said, translating into a valuation of 70 billion to 75 billion euros.
At the upper end of the range, first reported by Reuters, it would become Europe’s third-largest IPO on record. Trading will begin on the Frankfurt Stock Exchange on Sept. 29, Volkswagen said.
As part of the listing, 911 million Porsche AG shares will be divided into 455.5 million preferred shares and 455.5 million ordinary shares. Up to 113,875,000 preferred shares, carrying no voting rights, will be placed with investors over the course of the IPO.
The sovereign wealth funds of Qatar, Abu Dhabi and Norway as well as mutual fund company T. Rowe Price will subscribe up to 3.68 billion euros worth of preferred shares as cornerstone investors, at the upper end of the valuation.
“We are now in the home stretch with the IPO plans for Porsche and welcome the commitment of our cornerstone investors,” Volkswagen Chief Financial Officer and Chief Operating Officer Arno Antlitz said.
If the IPO goes ahead, Volkswagen will call an extraordinary shareholder meeting in December, where it will propose to pay 49% of total proceeds to shareholders in early 2023 as a special dividend.
What does this mean for VW’s shareholders and traders?
Volkswagen began negotiating an IPO of Porsche in late February. At the time, Reuters reported that the companies had not come to a final decision on the listing format, and the top valuation of Porsche was $102 billion. At the time, the news was perceived negatively, as the automaker needed additional financing because of the financial difficulties caused by the prolonged COVID-19 pandemic.
The rapid decline in VW’s share price began in February 2022 after news of the failed Porches IPO negotiations
Against the backdrop of failed IPO talks in February 2022, VW shares plummeted several dozen points.
This time around, negotiations were successful, albeit with a lower valuation for Porsche. Even with that in mind, investors, and traders were positive about the news. VW stock continues to rally strongly on Monday and Tuesday, September 19-20, 2022.
The rapid growth of shares began on September 19, 2022, after the news of the upcoming Porches IPO
A successful IPO at the end of September is likely to further fuel market participants and provoke an increase in demand for the concern’s shares. This is an excellent opportunity for all NAGA traders who want to get more out of the largest public offering in history.
Summary
- Volkswagen is targeting a valuation of $70.1 billion to $75.1 billion for luxury sports car maker Porsche.
- Volkswagen was expected to announce the pricing range of the Porsche IPO, planned for late September or early October, later in the evening.
- Porsche’s IPO, scheduled for late September, could become the largest in the European market in over a decade.
