Volkswagen is targeting a valuation of up to 75 billion euros ($75.1 billion) for luxury sports car maker Porsche, it said on Sunday, in what would be Germany’s second-largest initial public offering (IPO) in history.
Volkswagen will price Porsche AG’s outstanding preferred shares at 76.50 euros to 82.50 euros per share, the carmaker said, translating to 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, according to Refinitiv data. Trading will begin on the Frankfurt stock exchange on September 29, Volkswagen said.
As part of the listing, Porsche AG’s 911 million shares will be split into 455.5 million preferred shares and 455.5 million ordinary shares. Up to 113,875,000 non-voting preferred shares will be placed with investors during the IPO.
The sovereign wealth funds of Qatar, Abu Dhabi and Norway, as well as mutual fund company T. Rowe Price will subscribe to up to 3.68 billion euros of preferred shares as underlying investors, at the upper end of the valuation, Volkswagen said.
“We are now in the early stages with the IPO plans for Porsche and we welcome the commitment of our core investors,” said Volkswagen’s chief financial officer and chief operating officer, Arno Antlitz.
In line with Volkswagen’s deal in early September with its largest shareholder Porsche SE, 25% plus an ordinary share in the sports car brand, which carry voting rights, will go to Porsche SE at a price of preferred stock plus 7.5% premium.
Porsche SE, the holding firm controlled by the Porsche and Piech families, will finance the purchase of ordinary shares with debt capital of up to 7.9 billion euros, it said in a separate statement.
The total proceeds from the sale will be 18.1 billion to 19.5 billion euros. If the IPO goes ahead, Volkswagen will call an extraordinary meeting of shareholders in December, where it will propose to pay 49% of total proceeds to shareholders in early 2023 as a special dividend.
A stock exchange prospectus is expected to be published on Monday, after which institutional and private investors can subscribe to Porsche shares.
