Through its initial public offering (IPO), Porsche, a German automaker, will be able to recoup ten billion euros in capital. But most importantly, there will be a chance for the families descended from Porsche's founder to make a direct return to the headquarters of the iconic company.
 |
| [Porsche Car] |
Volkswagen launches Porsche in chase of Ferrari. The initial public offering (IPO) of the manufacturer of the Porsche 911 has finally been given the green light by the supervisory board of the Wolfsburg giant: the latter will introduce the most profitable of its twelve brands on the Stock Exchange. of Frankfurt, by the end of the year. The IPO has been in the works for two years and was announced in February of last year.
The transaction, which is shaping up to be one of the most significant initial public offerings (IPOs) in Europe, could make it possible for Volkswagen to free up cash while simultaneously enhancing the value of Porsche, which is now integrated into that of the company.
Similar to Ferrari, which was owned by the Agnelli family until 2014 when it was purchased by Chrysler. The Prancing Horse was able to achieve phenomenal success on the stock market as a result of the formation of two distinct businesses. Now recognized as a genuine luxury brand, the Prancing Horse's market value increased from $10 billion to $34 billion in only eight years.
The Volkswagen brand hopes to achieve the same level of success as Porsche with its illustrious 911 model, its Cayenne and Macan SUVs, and now its 100 percent electric Taycan. According to Philippe Houchois, an analyst at Jefferies, "it has delivered 9 to 10% growth in all its measures (volumes, sales, and operating income) over the last ten years."
Its operating margin in 2021 is projected to be 16%, which places it squarely in the top tier of automobile manufacturers. It is estimated that it is worth anything between 60 and 85 billion euros all by itself, which is nearly as much as the whole Volkswagen Group is worth today (87 billion).
However, here is where the parallel with Ferrari stops. Because, in contrast to Fiat Chrysler, which severed ties with Ferrari and became an independent company, the Volkswagen group will continue to maintain shares in Porsche. In the end, he only sold 25%, and only 12.5% of that was to investors from outside the company (without voting rights). The remaining 12.5% of the company, together with the associated voting rights, will be sold to the family holding company Porsche SE, which now owns 32% of the capital and 53% of the voting rights for the Volkswagen group.
Because of this transaction, the Wolfsburg manufacturer will be able to free up cash at a time when it has to spend tens of billions of euros on the development of an electric vehicle and associated software. It is anticipated that the company would collect close to ten billion euros as a result of the special dividend that will be distributed to its shareholders at the beginning of 2023. Philippe Houchois emphasizes the need of considering "what to consolidate its balance sheet, which is now made up mostly of hybrid debt." In exchange, though, he will forfeit twenty-five percent of the annual revenues made by the premium brand (5 billion in total last year).
In point of fact, the enterprise proves to be strategic only for the benefit of the two families that are descended from the person who founded Porsche (the Porsches and the Pichs). They had attempted to gain control of Volkswagen 10 years before, which resulted in the Wolfsburg group absorbing their automobile company and removing them from the capital of the brand. Since that time, they have been removed from the capital of the brand. Philippe Houchois came to the conclusion that they had misplaced almost two thirds of their money since that time.
They are hoping that if they return immediately to their turn, they will be able to profit from a more favorable value. But also to preserve the power to exercise oversight over the distribution of monetary flows. According to Philippe Houchois, "With 25% of the shares with voting rights, 'plus one,' the family holding company will possess a blocking minority on the deployment of Porsche resources, other than the dividend or investments allocated to Porsche."
In other words, the group will not be able to spend the income that is created by Porsche for whatever purpose they like going forward. Volkswagen also makes reference to its aim to "give back a certain entrepreneurial freedom to Porsche." [Citation needed] According to the expert, "However, Porsche was in point of fact already handled separately." In addition to this, the fact that Oliver Blum is the CEO of both Volkswagen and Porsche raises doubt on the validity of the claim.
Arno Antlitz, the financial director of Volkswagen, wanted to reassure analysts despite their pessimism about the timing of the operation and the governance that will result from it. These analysts are concerned about when the operation will take place and how it will be structured after it is completed. "From our vantage point, the business is extremely well balanced and falls between in the middle of an initial public offering and a spin-off. He described it as having "the best of both worlds." It would seem that investors have been won over, as the share price of Volkswagen increased by 3.71 percent on Tuesday.