Hard to pick a worse time to launch the largest IPO in German history, the most important of a difficult year: the Russian gas taps closed, the federal budget under stress to support families and businesses with 65 billion. This morning another cold shower: industrial orders still down by 1,1%, worse than expected. But the Volkswagen giant goes ahead and has decided to launch thePorsche IPO.
Volkswagen goes ahead with the Porsche IPO and the title goes up in Frankfurt
It takes much more than the gas crisis to influence the timing and ways of the giant Volkswagen, the true symbol of German records, a car that is not afraid of the Kremlin's upcoming challenge. And so, in the same hours in which Putin's spokesman explained that, faced with the embargo of the Siemens turbines, Gazprom had decided to stop gas supplies to Germany and Europe, Volkswagen's supervisory board announced its intention to proceed with the Porsche IPO within a few weeks, between September and October.
"Perhaps they should evaluate the timing of the announcements better," commented ironically Stifel, the broker who points out that the first announcement of the operation was released on February 24th, just a few hours after the start of the invasion in Ukraine. ”But we – Oliver Blue replies from a distance, now head of both Porsche and the parent company – have shown that we can always make good profits, both at the time of the pandemic and the chip crisis. And also in the face of the war in Ukraine”. A proud response that won the applause of the Frankfurt Stock Exchange where Volkswagen shares are gaining nearly 2% today, anticipating the effects of the injection of funds which, thanks to the listing of Porsche, could end up in the group's coffers.
Porsche IPO: Who will buy the shares?
But even in Wolfsburg they are aware of the risks of Porsche returning to the stock market at a time of great weakness in the stock markets, but also in the car sector, in the middle of the ford of the most complex technological operation in history and, by overmarket, of the first signs of weakness coming from the world of luxury. Not surprisingly, to make possible the landing of Porsche (valuation of the parent company at 84/85 billion euros, but a low point of the range around 60 billion) German big finance has been in full swing for months. Certainly the operation will participate Qatar Investment Authority which, in line with the stake held in Volkswagen, will subscribe to 4,99 of Porsche. And the participation of Bernard Arnault, determined to set foot in the world of luxury cars. But also of Dietrich Mateschitz, the volcanic owner of Red Bull, already a great protagonist of Formula 1. And then, according to Bloomberg, a real offensive is underway, even in Italy (Mediobanca is also part of the consortium), to convince family offices and the most exclusive players to bet on Porsche preferred shares.
The operation does not change the balance for the control of Volkswagen
Yes, because the listing project of Porsche, by far the most profitable participation of the Volkswagen group, does not question the balance of the Stuttgart jewel. Indeed, at the end of the operation, the levers of power will be more than ever in the hands of the heirs of Ferdinand Porsche, the creator of the Beetle, and of the Piech family. The scheme, in fact, provides that the shares of Porsche are divided equally between ordinary and preferred shares. The latter, equal to 50% of the capital, will be offered to the public while a quota of the ordinary ones, equal to 25% of the capital plus one share, will be purchased by the Piech/Porsche families, who will thus regain direct control of the company, lost to the advantage of Volkswagen in the ill-fated takeover of 2008.
Revolution or Restoration? The IPO serves to finance the electric car
In short, the revolution tastes like a restoration, guaranteed by the typical consensus that governs the giants across the Rhine: a part, 20% of the proceeds, will end up in the form of extra dividend to Volkswagen shareholders, among which the government of Saxony stands out. A bonus of 2.000 euros will end up in the pockets of the workers, very welcome even in times of double-digit inflation. Now, however, the difficult part begins. Both for Porsche, which has in any case demonstrated with the Taycan that it knows how to ride the electric revolution, and for Volkswagen: the capital raised with the IPO will be used to finance the complicated transition from combustion to electric cars, difficult in terms of technology and of labor relations, very complicated in times of recession. But the corporate actors (family, Saxony and trade unions) do not hold back.
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