Volkswagen shares dip as it values Porsche at up to $75b

BERLIN: Volkswagen shares rose slightly on Monday ater the carmaker said it was targeting a valuation of up to 75 billion euros ($74.84 billion) for sportscar brand Porsche, in potentially Europe’s third biggest IPO ever.

Porsche aims to win over investors with its stable brand and high operating margins even as the stocks of other luxury carmakers like Ferrari and Aston Martin have suffered this year amid the tumult in European stock markets.

The valuation announced on Sunday of 70 billion-75 billion euros is slightly below some investors’ estimates of up to 85 billion euros, but still far outstrips the valuation of other German carmakers like BMW’S 49 billion euros or Mercedes-benz’ 61 billion.

It also comes close to Volkswagen’s own market capitalisation of 88 billion euros. The carmaker saw its shares rise 3% in premarket trade. By 0914 GMT they were only slightly higher at 145.6 euros, from 145.46 at Friday’s close, but bucked a drop in European shares.

While the IPO could still be pulled before trading starts on Sept. 29, Porsche AG’S Chief Financial Officer Lutz Meschke said in early September this would only happen in the event of new “severe geopolitical problems”. Volkswagen, which analysts have said could see its own valuation bumped up by the listing through showcasing the worth of just one of its premium brands, saw its shares rise 3 per cent in premarket trade but by 0838 GMT they were up just 0.4 per cent, from Friday’s close.

Shares in Porsche Holding SE, Volkswagen’s largest shareholder, were 3.23 per cent higher, topping Germany’s DAX blue-chip index.