Initial public offerings (IPOs) in Europe have long lagged behind their US counterparts; however, a new IPO of a premier car brand may bring some solace to EU investors looking to spice up their portfolios with fresh IPOs.
Thus, Volkswagen is looking to float Porsche AG shares on September 29, on the Frankfurt Stock Exchange. Apparently, the valuation they’re aiming at is €75 billion ($75.1 billion) for the luxury sports car brand, from the previous high-end range of €85 billion.
Further, VW group will look to price the share of Porsche AG at €76.50 to €82.50 per share, which translates to a range of €70-75 billion. If the initial public offering (IPO) reaches the upper range, it will be the third largest IPO in Europe of all time.
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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
Volkswagen Chief Financial Officer and Chief Operating Officer Arno Antlitz said:
“We are now in the home stretch with the IPO plans for Porsche and welcome the commitment of our cornerstone investors.”
What they’re selling
The Porsche IPO will basically contain 25% of preferred shares on the open market; However, Qatar has pledged to buy up 4.99% of the float, leaving 20.01% for the market participants or 10% of Porsche’s total capital.
Furthermore, 25% plus one ordinary share in Porsche AG will be sold to Porsche SE, the holding firm controlled by the Piech and Porsche families, giving them a blocking minority in the brand.
Finally, 75% minus one ordinary share of Porsche AG’s total share capital will be owned by Volkswagen Group. Once the funds are raised, the proceeds are intended to go to the development of electric vehicles (EVs) and investment in software.
Moreover, according to an earlier Finbold report on Porsche, after all its taxes have been paid, the firm will target to pay out 50% of its earnings as a dividend to its shareholders in the mid-term.
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