Author: Victoria Waldersee
BERLIN (Reuters) – Porsche will abandon its stock market debut only if there are serious geopolitical challenges that would make the listing’s significance pale in comparison, the sports car brand’s chief financial officer said on Tuesday.
“You never know what will happen with geopolitical issues, but if a potential IPO is stopped now, we are talking about serious problems,” Lutz Meschke told the media.
“Until then, a potential IPO won’t be a real issue,” he added.
Volkswagen (ETR: ) initiated the listing of sports car brand Porsche AG late on Monday after months of deliberation, but warned that the move still depends on market developments.
Oliver Blume, CEO of Porsche and now Volkswagen, told the media on Tuesday that the listing could help revive capital markets hit by a slowdown in global growth.
“There’s a lot of capital in the market,” Blum said. “We believe the Porsche IPO could be an icebreaker.
Investors value Porsche AG between 60 and 85 billion euros ($60-85 billion).
Volkswagen and Porsche executives declined to comment on what valuation they expect, saying only that they believe Porsche will be attractive to investors even in such turbulent times.
“If there’s a company that can succeed in these challenging market conditions, it’s Porsche,” Meschke said.
Porsche is making money for the Volkswagen Group, with operating profit up 22% in the first half of the year, compared with an 8% drop for the mass-produced Volkswagen brand.
A higher valuation would make Volkswagen shares more attractive. But that would leave the group’s main shareholder Porsche SE, which will receive 25% plus one share of Porsche AG common stock at a 7.5% premium, require significant financing to fund its stake in the sports car brand, Bernstein analyst Daniel Roeska said in a research note. a note
Asked how conflicts of interest would be handled for Blum, who will remain head of both companies even after the listing, the CEO said Porsche AG’s executive board would have “100% independent” decision-making powers.
At 08:44 GMT, shares of Volkswagen and Porsche SE were up about 1% at €144.94 and €70.05, respectively.
“Since some were already afraid of the IPO being cancelled, this is a clear relief at the moment,” Frank Schneider, a trader at Alpha Wertpapierhandels in Frankfurt, said of the decision to launch the IPO.
Volkswagen Chief Financial and Operating Officer Arno Antlitz added in an earlier call that the automaker hoped the listing would give it more flexibility in deciding when to list its battery division, which it said in December was preparing for a partial sale.
($1 = €1.0045)