Porsche races higher after landmark $72 billion listing
Porsche AG shares made a strong start on Thursday ater Volkswagen defied volatile markets to list the sportscarbrandatavaluationof75billioneuros($72 billion) in Germany’s second-biggest market debut.
Volkswagen priced Porsche AG shares at the top end of the indicated range and raised 19.5 billion euros from the flotation to fund the group’s electrification drive. By 1035 GMT Porsche AG stock was trading 3 per cent up from the issue price of 82.50 euros.
That lited Porsche AG’S valuation to 77.4 billion euros,closetothemarketcapitalisationofvolkswagen as a whole, which is worth about 80.1 billion euros, and ahead of rivals such as Ferrari. It is Germany’s biggest listing since Deutsche Telekom in 1996.
Oliver Blume, in a Reuters interview, brushed aside concerns about his dual role as CEO of both Porsche AG and Volkswagen, saying the decision was made “very consciously”.
Porsche AG’S strong start came despite broadly weaker stock markets ater red-hot German inflation data.
Shares in Volkswagen and holding company Porsche SE, which owns a blocking minority in Porsche AG, were down 4.6% and 8% respectively as investors switched across.
“This is not exactly a dream environment for an IPO today,” said QC Partners wealth manager Thomas Altmann.
Porsche’s flotation comes at a time when European listings face their worst year since 2009, with investors freting about a possible global recession against a backdrop of soaring inflation, rising interest rates and the war in Ukraine.
Porsche is a one-off icebreaker for the IPO market, which will freeze over again very soon, said one banker involved in the transaction.
Companies in the region have raised $44 billion from equity capital markets deals up to Sept. 27, Refinitiv data shows, with only $4.5 billion from initial public offerings.
“There’s a lot to like about the company, with itsaggressiveelectrificationplans,expectedstrong cashflow generation and premium brand positioning in the market,” Chi Chan, Porfolio Manager European Equities at Federated Hermes Limited, told Reuters.
“However, it is coming to market at a time of unprecedented turmoil and consumer confidence is falling.”
Despite the euphoria surrounding the Porsche IPO, it will remain tricky for further listings, said
Malte Hopp, head of Equity Capital Markets (ECM) for Germany and Austria at Citi.
Porsche AG Chief Executive Blume, whose dual role as the new head of Volkswagen has drawn criticism from some investors, hailed the listing as an “historic moment” as he hugged colleagues and rang the bell on a packed Frankfurt stock exchange trading floor.
Volkswagen has said the market’s volatility was precisely why fund managers were sorely in need of a stable and profitable business like Porsche AG in which to invest.
“Porsche was and is the pearl in the Volkswagen Group,” said Chris-oliver Schickentanz, chief investment officer at fund manager Capitell. “The IPO has now made it very, very transparent what value the market brings to Porsche.”
Faced with costs in the tens of billions for sotware and a radical shit towards electric mobility, Volkswagen executives had long considered listing Porsche, a move executives hoped would raise much-neededfundsandlitvolkswagen’sownvalue.
The Porsche and Piech families, whose holding company Porsche SE controls Volkswagen, will in turn solidify their control over Porsche AG because they will own 25 per cent plus one ordinary share - carrying voting rights - in the sports car brand.
Up to 113,875,000 Porsche AG preferred shares, carrying no voting rights, were sold in the initial public offering.
Bankofamerica,citigroup,goldmansachsand Jpmorgan worked as joint global coordinators and joint bookrunners on the deal, while Mediobanca acted as financial adviser to Porsche.
Shares in sports car maker Porsche AG, maker of the iconic 911 model, started trading in Frankfurt on Thursday in what marks Germany’s secondbiggest ever listing.
Porsche’ssharecapitalwassplitintwo,with455.5 million ordinary shares and the same number of preferred shares, totalling 911 million shares overall, a play on the company’s most famous model. Ordinary shares carry voting rights, which mater when it comes to the question of who controls the company.preferredsharesdon’tcarryvotingrights, but their holders will receive an additional dividend of 0.01 euros apiece on top of every dividend the company pays out on ordinary shares.
As part of the deal, Volkswagen sold 25 per cent plus one ordinary share in Porsche AG to Porsche SE, the holding firm controlled by the Piech and Porsche families, effectively giving them a blocking minority in the namesake brand.
Porschecfolutzmeschkeandtheceoofstock operatordeutscheboerseagtheodorweimerwere present during the launching of the company’s initial public offering (IPO) at the Frankfurt Stock Exchange in Frankfurt, western Germany.
Porsche AG’S strong start came despite broadly weaker stock markets ater red-hot German inflation data