Porsche shares apartment at closing after historic $72 billion listing

  • Shares valued at the top of the range indicated at 82.50 euros
  • Largest listing in Germany since 1996
  • Shares stable at market close after peaking at 86.54 euros
  • IPO unlikely to reopen frozen markets -banker

FRANKFURT, Sept 29 (Reuters) – Shares of Porsche AG got off to a rocky start on Thursday after Volkswagen (VOWG_p.DE) defied volatile markets to list the sports car brand at a 75 billion valuation euros ($72 billion) in second place in Germany. -greater market entry.

The shares closed at 82.50 euros ($80.74), returning to their issue price from the session high of 86.76 euros.

Volkswagen has priced Porsche AG shares at the high end of the indicated range and raised 19.5 billion euros via the listing to fund the group’s electrification campaign.

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Leading investors including Qatar Investment Authority, T. Rowe Price, Norway’s sovereign wealth fund and Abu Dhabi claimed 40% of the stock offering.

Some 25% plus one ordinary share went to the Porsche and Piech families through Porsche SE, Volkswagen’s largest shareholder which now holds a blocking minority in the sports car brand.

The shares peaked at 86.76 by late morning.

The stock’s performance puts Porsche AG’s valuation at around 75.43 billion euros, slightly below former parent company Volkswagen, which is worth around 80.1 billion euros, and ahead of rivals such as Ferrari (RACE.MI). This is the largest listing in Germany since Deutsche Telekom (DTEGn.DE) in 1996.

Shares of Porsche SE (PSHG_p.DE), the largest shareholder in Volkswagen, which now also has a blocking minority in the sports car brand, fell 10.9% on the change in investors. Volkswagen shares were down 6.9% from Thursday’s open at 128.5 euros.

Traders said some investors who bought Volkswagen and Porsche SE in an IPO could unwind their positions and switch to Porsche AG, undermining Volkswagen’s aim to increase capitalization by showcasing value of one of its brands.

“Porsche was and is the pearl of 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.”

Volkswagen CEO Arno Antlitz told Reuters the listing helped fund the automaker’s electrification drive.

Of the €19.5 billion raised in the IPO, around €9.6 billion will go to Volkswagen – just under a fifth of the €52 billion budget needed for electrification plans – the remainder being distributed to shareholders in the form of an exceptional dividend.

“We are well organized financially and have strong cash flow to fund our electromobility strategy ourselves,” said the CFO.

“NOT A DREAM ENVIRONMENT”

Volkswagen has priced Porsche AG shares at the high end despite weaker stock markets overall after searing German inflation data and general market turmoil from rising interest rates.

“It’s not exactly a dream environment for an IPO today,” QC Partners wealth manager Thomas Altmann said.

Volkswagen said market volatility was precisely why fund managers badly needed a stable and profitable company like Porsche AG in which to invest.

A banker involved in the transaction described Porsche’s listing as a one-time announcement, predicting the market would freeze again very soon.

The listing broke records, fetching the highest amount since Deutsche Telekom in 1996.

But Porsche is trading at a multiple of around 7.2 times earnings – well below Ferrari’s (RACE.MI) multiple of 40.

Companies in the region raised $44 billion through capital markets transactions through September 27, according to Refinitiv data, with just $4.5 billion coming from initial public offerings.

“There’s a lot to love about the business, with its aggressive electrification plans, strong expected cash flow generation and premium brand positioning in the market,” Chi Chan, manager of the company, told Reuters. European equity portfolio at Federated Hermes Limited.

“However, it is coming to market at a time of unprecedented turmoil and consumer confidence is declining.”

Porsche against its rivals

Porsche AG chief executive Blume, whose dual role as new Volkswagen chief has drawn criticism from some investors, hailed the listing as a “historic moment” and dismissed the idea that he would give up a given time at one of the two positions.

Up to 113,875,000 non-voting preferred shares of Porsche AG were sold in the IPO.

Bank of America, Citigroup, Goldman Sachs and JPMorgan worked as global coordinators and joint bookrunners on the deal, while Mediobanca acted as financial advisor to Porsche.

($1 = 1.0218 euros)

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Reporting by Victoria Waldersee, Emma-Victoria Farr, Hakan Ersen, Christoph Steitz, Alexander Huebner, Sinead Cruise and Pamela Barbaglia; Written by Victoria Waldersee and Matthias Williams; Editing by Jane Merriman, Mark Potter and David Goodman

Our standards: The Thomson Reuters Trust Principles.

Emma Victoria Farr

Thomson Reuters

European M&A reporting with previous experience at Mergermarket, Bloomberg The Daily Telegraph and Deutsche Presse Agentur.

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