VW Group divided Porsche’s share capital into equal parts voting and non-voting shares, with the German carmaker retaining 75 percent ownership.
Some 12.5 percent of total share capital –- only non-voting shares –- is being publicly listed, with a large portion going to four cornerstone investors. Qatar Investment Authority, Norway’s sovereign wealth fund, T. Rowe Price and ADQ have together committed to take up as much as $3.5 billion of the IPO.
The other 12.5 percent of total shares up for grabs is going directly to VW Group’s largest shareholders –- the billionaire Porsche and Piech family –- via their investment company Porsche SE. The family already owns a 53 percent majority of VW’s voting shares, and under the IPO terms, they will also get 25 percent plus 1 share of Porsche AG’s voting stock, paying a small premium to preferred shares for a total of $9.7 billion.
Restoring control
Porsche SE will mostly finance the acquisition with debt capital of $7.6 billion, buying shares in two tranches starting next month with the second purchase expected in January, following a special dividend payout by VW Group.
Up until 2009, the family owned half of Porsche and all voting rights, but they were forced to sell the sports-car business to VW after their attempt to take over German carmaker went awry. The IPO restores family control over an asset that has been long out of reach: They get a blocking minority on the sports-car maker’s supervisory board, and their status as VW anchor shareholder bolsters that control.
Porsche is targeting revenue of as much as $37 billion this year and return on sales of as much as 18 percent, up two percentage points from last year, the company said in July. Returns are to climb above 20 percent in the long term.
The company is still best known for its 911 model, though Porsche has expanded its lineup significantly in the past decade by adding popular sports-utility vehicles like the smaller Macan, as well as the four-door Panamera and the battery-powered Taycan.
Besides the byzantine ownership structure, governance is another issue for some investors. Porsche CEO Blume was recently elevated to CEO of VW Group, while retaining his post at the unit.
According to an analysis from Bernstein, Porsche’s market capitalization should sit at $77 billion – just below luxury companies but at the higher end of carmakers.
“Compared to the luxury companies, Porsche still exhibits higher volatility in earnings growth and margin profile,” wrote European autos analyst Daniel Roeska. “Porsche has only grown volumes significantly by adding new formats, and that does not seem likely in the upcoming years.”
