Dhe shares of the sports car manufacturer Porsche started trading on the Frankfurt Stock Exchange at 84 euros on Thursday morning. Immediately after the start of trading, they are already above the issue price of EUR 82.50. The Stuttgart luxury car manufacturer was thus valued at around 75 billion dollars and is therefore considered a hot candidate for the Dax, “We have successfully taken Porsche to the stock exchange. Today is a good day for Porsche and for Volkswagen,” said Volkswagen CFO Arno Antlitz shortly before the initial listing.
At 9:15 a.m. sharp, Porsche boss Oliver Blume, who also heads the parent company VW, rang the symbolic stock exchange bell together with his chief financial officer, Lutz Meschke. He thus brings a project over the finish line that whole armies of business lawyers, consultants and investment bankers have been working on for months, the IPO of the sports car manufacturer from Stuttgart. The issue price was set at EUR 82.50 per share, the upper end of the price range most recently targeted. Trading begins at 84 euros. However, the share then gives way and falls by 1.5 percent in the first few minutes, a signal that those involved had certainly imagined things differently.
Almost 114 million preferred shares from Porsche come with the initial public offering – English IPO – on the market, even if a large part goes to anchor shareholders such as the Qatar Investment Authority and the Norwegian sovereign wealth fund. The sale of the paper brings in 9.4 billion euros for the parent company VW. In terms of issue volume, it is the largest IPO in Germany since 1996, when Telekom celebrated its debut on the Frankfurt trading floor.
Before the first few minutes of trading, in which those responsible stared spellbound at the price board in view of the falling price, Blume had still been emotional. “A dream come true,” he said. CFO Meschke also emphasized the historical significance of the step. “We have been building sports cars at Porsche for almost 75 years.” Today’s return to the stock exchange is “an important day” for the company, even though the environment is “challenging” due to the war in Ukraine, the tense supply chains and other global ones. However, Porsche has “repeatedly shown that we are successful in difficult times”.
nervousness beforehand
The hustle and bustle of the Porsche team shows just how nervous we were beforehand. A run was already made on Wednesday. Who has to stand where and when? When is which interview in front of which camera? Even if it is a return to the stock exchange for the company, it is new territory for those responsible today. Some observers find that there is surprisingly little going on in the morning – when Daimler Trucks debuted on the stock exchange, it was full. Later, however, the trading floor fills up noticeably.
Theodor Weimer, head of Deutsche Börse, picks up on this mood and praises those responsible at Porsche. “There is a lot of work behind you, dear Porsche team. “It certainly felt like several 24-hour races.” “The myth lives on,” he says at the opening. It is “a good day for the German capital market”. Exactly 911 months ago, work began on the first Porsche sports car, and now the company is opening a new chapter – one of the many allusions to the iconic Porsche 911 model around the IPO.
IPO with many special features
One of the special features of this IPO is that VW not only sells non-voting preferred shares on the stock exchange, but also sells 25 percent plus one share of the voting common shares to Porsche SE, the holding company of the Porsche and Piëch families, which is also listed on the Dax. The holding company now has a blocking minority and increases its control over the sports car manufacturer, in which it previously only held an indirect stake through its VW shares.
Including the sale of trunks and preference, VW will receive 19.5 billion euros based on the issue price. The group intends to distribute almost half of this as a special dividend, which in turn will benefit Porsche SE to a large extent. The other half remains for VW for investments, for example in battery cell factories, of which the group wants to build six in Europe alone.
An extraordinary general meeting, which VW is expected to convene in December, is to vote on the special dividend. The money will then be distributed at the beginning of 2023 – and will serve as an important financing component for Porsche SE in order to be able to take over the ordinary shares. Porsche SE intends to pay the purchase price for the first tranche of ordinary shares to VW in October, and the rest only next year when the special dividend has been paid.
This complex financial flow, which acts like a cyclical business, is one of the many special features of the IPO of Porsche. Other constellations, such as Oliver Blume’s dual role as head of the sports car manufacturer and the parent company VW in a personal union, had recently caused criticism. A number of experts see this as a violation of the common rules of good corporate governance. Porsche, on the other hand, emphasizes that it is able to make possible conflicts of interest transparent and to be able to control them, also with the help of external consultants.
