Porsche debuts with $72 bln price tag in bumper IPO

Date:

FRANKFURT, Sept. 29 (Reuters) – Porsche AG made its stock market debut on Thursday, with a price tag of around 75 billion euros ($72.45 billion) after Volkswagen (VOWG_p.DE) priced stock at the top of its range, defy turbulent market conditions.

The bumper flotation, expected to raise around €19.5 billion ($19.0 billion), comes as instability in European markets has deterred other automakers’ equity sales, including luxury brands.

The sale values ​​Porsche AG close to the market capitalization of its parent company Volkswagen, which is worth around €84 billion, and gives it an edge over rivals such as Ferrari (RACE.MI).

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The books closed on Wednesday on what is one of Europe’s largest IPOs and the second largest in Germany since Deutsche Telekom (DTEGn.DE) made its debut in 1996, at the higher end of the 76.50-82.50 euros it previously held. announced this month.

Shares opened at EUR 84.00 each and traded at EUR 82.88 at 0733 GMT.

Shares in Porsche SE (PSHG_p.DE) fell 5.7% in early trading in Frankfurt. Shares in Volkswagen fell 4.9% in early trading in Frankfurt.

Companies in continental Europe have raised the smallest amount this year since the 2009 global financial crisis at $44 billion, of which only $4.5 billion comes from IPOs, based on Refinitiv data.

Volkswagen has said that market volatility was precisely why fund managers with money to invest desperately needed a stable and attractive stock like Porsche AG.

“Porsche was and is the jewel in the Volkswagen group,” said Chris-Oliver Schickentanz, chief investment officer at fund manager Capitell.

“The IPO has now made very, very transparent what value the market brings to Porsche. Of course, that also has a positive effect on Volkswagen shareholders.”

Faced with tens of billions of costs for a radical shift to electric mobility and software, Volkswagen executives had long considered including Porsche on the list.

The Porsche and Piech families, in turn, will strengthen their control of the carmaker by 25%, plus one common share – with voting rights – in Porsche AG, effectively giving them a blocking minority in the eponymous brand.

During the IPO, a maximum of 113,875,000 preference shares without voting rights will be sold to investors.

Porsche vs Rivals

($1 = 1,0352 euros)

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Reporting by Victoria Waldersee and Emma-Victoria Farr; writing by Victoria Waldersee and Matthias Williams; Editing by Hugh Lawson, Richard Pullin and Jane Merriman

Our Standards: The Thomson Reuters Trust Principles.

Emma-Victoria Farr

Thomson Reuters

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

The Valley Voice
The Valley Voicehttp://thevalleyvoice.org
Christopher Brito is a social media producer and trending writer for The Valley Voice, with a focus on sports and stories related to race and culture.

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