Volkswagen shares up 3% in premarket on Porsche AG valuation

Volkswagen shares rose 3% in pre-market trading on Monday to top the German blue-chip index, after the automaker said it expects to value the Porsche sports car brand to 75 billion euros.

Shares of Porsche Holding SE, Volkswagen’s largest shareholder, rose 2.7%.

Volkswagen announced on Sunday that it will value Porsche AG preferred shares at a price of between €76.50 and €82.50 per share, in what could be the second largest German initial public offering in history.

At the top of the range, this will be Europe’s third-largest IPO on record, according to Refinitiv data. Trading will begin on the Frankfurt Stock Exchange on September 29, Volkswagen said.

As part of the listing, Porsche AG’s 911 million shares will be divided into 455.5 million preferred shares and 455.5 million ordinary shares. During the IPO, up to 113 875 000 preferred shares without voting rights will be placed among investors.

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An announcement with more details about the listing will be published on Monday afternoon.

As part of Volkswagen’s September deal with Porsche SE, 25% plus one ordinary share of the voting sports car brand will go to Porsche SE at the price of preferred shares plus a 7.5% premium.

In another statement, it is said that Porsche SE will pay for the acquisition of ordinary shares with borrowed capital up to 7.9 billion euros.

The total proceeds from the sale will be between 18.1 billion and 19.5 billion euros. Once the IPO goes through, Volkswagen will call an extraordinary shareholder meeting in December, where it will offer to pay shareholders 49% of total revenue in early 2023 as a special dividend.