Investors mixed as Porsche seeks price tag of up to $75 billion

Volkswagen shares hovered around breakeven on Monday, reflecting a mixed response from investors to the automaker’s listing plans for sports car brand Porsche AG in what could be Europe’s third biggest initial public offering.

Volkswagen said on Sunday it was aiming for a valuation of 70 billion-75 billion euros ($70-75 billion) for Porsche AG, slightly below some estimates of up to 85 billion euros, but far outstripping the 49-billion-euro price tag for rival BMW and Mercedes-Benz’s 61 billion euros.

Porsche AG aims to win over investors with its track record of success and high margins, even as shares of other luxury carmakers like Ferrari and Aston Martin have suffered this year in the tumult on European stock markets.

But the structure of the listing, in which Volkswagen’s largest shareholder – Porsche SE – will receive a blocking minority of 25% plus one of the voting ordinary shares, has sparked criticism from some fund managers.

The IPO will list 25% of preferred shares, which do not have voting rights, meaning stock market investors will own just 12.5% of Porsche AG’s capital and have little say.

via Reuters