The Porsche family will own more than 25% of the automaker as the IPO nears

VW, Europe’s biggest carmaker by sales, said the companies’ boards will meet on Monday to discuss the private placement of common stock and whether to proceed with an initial public offering of 25 percent of its non-voting preferred stock. Porsche. If approved, Porsche shares could begin trading at the end of the month or early October, VW said.

Porsche SE is an investment fund majority-owned by the brand’s founder’s family, while Porsche AG is the automaker itself.

Industry analysts estimated the listing could value Porsche, maker of the 911 sports car and Taycan electric sedan, at between 60 billion and 85 billion euros, equivalent to a range of about $59.72 billion to $84.6 billion dollars. This means that the IPO could raise more than 10 billion euros, or double that together with the share placement.

This would make it one of the biggest IPOs in Europe in years. The largest European IPO on record is the listing of Italian energy group Enel SpA, which raised $17 billion in 1999, according to Dealogic. But VW’s decision to trade only the non-voting stock has angered some investors and could make it harder to get a top price for the shares, analysts said.

The way Porsche’s listing is structured, keeping voting shares for insiders and floating non-voting shares for other investors, “is mainly about securing the family as the main shareholder of Porsche,” said Ingo Speich, head of sustainability and corporate governance at Deka Investment. “The family wants to keep the reins in their own hands.”

Recent management turmoil at VW has also worried investors. In late July, the Porsche-Piech family helped oust Herbert Diess, who has been CEO since 2018 and is credited with restoring VW’s tarnished reputation after the diesel emissions cheating scandal and driving the company to electric vehicles.

Volkswagen’s new CEO, Oliver Blume, also runs Porsche.


Photo:

Daniel Rolland/Agence France-Presse/Getty Images

The board chose Porsche CEO Oliver Blume to replace him as head of VW, but lined up some investors allowing Mr. Blume to keep his position as head of Porsche. Some investors see potential conflicts of interest in the dual role, especially ahead of the planned IPO.

In late July, a poll conducted by Bernstein Research found that 71 percent of respondents believed that Mr. Blume’s dual role would have a negative impact on Porsche’s IPO.

VW Chief Financial Officer Arno Antlitz said in July that the company remained committed to the IPO, which he said would give Porsche greater business independence while VW “would have more flexibility in financing the transformation.”

VW launched an internal review in February to prepare for a possible Porsche entry. While the European economy has suffered from rising energy prices following Russia’s invasion of Ukraine, VW executives have reaffirmed their commitment to an IPO in recent weeks.

Before listing up to 25 percent of Porsche, the company’s stock will be split into common shares with voting rights and non-voting preferred shares, VW said in February. The Porsche family would acquire 25 percent plus one share of Porsche AG common stock with voting rights at a 7.5 percent premium to the IPO price, VW said in February, pending an internal review.

In addition, VW will dispose of 25% of Porsche’s non-voting preferred shares.

The listing will provide additional funding for VW’s transition into a leading electric vehicle maker and for investment in autonomous driving and battery development.

Acquiring a sole minority stake in Porsche would also mark a symbolic turnaround for the heirs of Ferdinand Porsche, designer of the original VW Beetle, and his son, Ferry Porsche, who built Porsche into a leading sports car maker after World War II .

By 2007, Porsche was so valuable that it tried to take on the much larger Volkswagen. After the financial crisis, Porsche ran into difficulties due to the huge loans it took out to finance its takeover bid and later abandoned the effort.

In 2012, Volkswagen acquired Porsche AG, making the family VW’s largest shareholder. By acquiring a blocking minority stake in Porsche, the family will restore some of its control over the car industry.

Write to William Boston at william.boston@wsj.com

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