HAMBURG/BERLIN (Reuters) -Volkswagen and its top shareholder have drawn up a preliminary agreement to list Porsche, paving the way for a deal that investors hope will unlock value from the luxury car brand and could be one of the world’s largest stock market debuts.
A listing could also shift the balance of power at Europe’s biggest carmaker if its top shareholder group, the Porsche and Piech families, decides to cut its stake in Volkswagen (DE:VOWG_p) to buy into the initial public offering (IPO) of Porsche AG – an option previously flagged by sources.
Such a move would loosen the families’ grip on the German group in favour of direct ownership of the sports car brand founded by their ancestor Ferdinand Porsche in 1931.
Volkswagen is weighing issuing an equal number of ordinary and preference shares in a potential Porsche AG listing and may pay a special dividend to its owners to drum up support, two people familiar with the matter told Reuters.
Ordinary shares confer voting rights and Porsche SE, the holding company of the Porsche and Piech families that hold 53.3% of voting rights at Volkswagen, said it could buy ordinary shares in any listing of Porsche AG.
The sources said Volkswagen may seek to list 25% of Porsche AG if the IPO goes ahead.
Volkswagen and Porsche SE declined to comment on details of a potential listing, but the carmaker said a final decision had not been taken and any deal must be approved by management and supervisory boards.
Shares in both Volkswagen and Porsche SE jumped about 10% on Tuesday, with investors hoping a listing could boost Porsche’s value and give Volkswagen extra financial clout as it transitions towards electric vehicles.
Depending on the size of a share sale, a listing of Porsche AG could be one of the largest in Europe with valuation estimates of up to 90 billion euros ($102 billion).
($1 = 0.8820 euros)