According to insiders, preference shares of more than five percent are to be offered to the anchor investors.
The target is a valuation of 60 billion euros.
Wien. Porsche wants to complete one of the largest IPOs in Europe despite the difficult market environment and valuation concerns (“Die Presse” reported). To do this, the sports car maker is seeking to secure some of the Middle East’s largest sovereign wealth funds as anchor investors, people familiar with the matter said. Abu Dhabi’s Mubadala Investment Co. and ADQ are among those considering listing the Volkswagendaughter, said those who did not want to be named.
State-owned companies in other Gulf states, including Saudi Arabia, are also considering entry, it said. The IPO advisors have also reached out to major Canadian and Malaysian funds, as well as Norway’s sovereign wealth fund, one of the people said. It has been reported that Volkswagen is considering offering anchor investors more than five percent of Porsche preferred shares. The existing VW shareholder Qatar Investment Authority has already decided to become a strategic investor in Porsche.
Adding more funds would be a vote of confidence given the automaker’s premium valuation drive. The state of Lower Saxony, another VW shareholder, and the Porsche-Piëch families are aiming for a valuation of at least 60 billion euros, the people said.
In early discussions with portfolio managers, the IPO was touted as an opportunity to invest in a company that has the best of automaking rivals like Ferrari NV and luxury brands like Ferrari Louis Vuitton united in itself. However, some investors are concerned about the listing structure, which does not make Porsche more independent from its parent company, as well as headwinds in the IPO market, according to people familiar with the matter.
Further criticism of Oliver Blume
During the IPO preparations, criticism of the decision to put Porsche boss Oliver Blume at the helm of parent company Volkswagen continued. In a survey of 58 fund managers by Bernstein & Co., 71 percent said that Blume’s dual role was a clear disadvantage for the IPO. Discussions are still ongoing and it is not certain, according to informed sources, that the funds will make any firm commitments. A spokesman for Porsche and Volkswagen said more information on the progress of the IPO is expected in late summer.
ADQ, Norges Bank Investment Management and QIA representatives declined to comment. Middle East funds control trillions of dollars and have benefited from rising energy prices this year. They have poured money into global markets to take advantage of falling valuations. They invested in a wide range of assets from football clubs to luxury start-ups for electric vehicles. Volkswagen has selected Goldman Sachs Group Inc, Bank of America Corp, JP Morgan Chase & Co and Citigroup Inc. as joint global coordinators for the Porsche IPO.