ollo
The IPO market may be drying up in the current investing environment, but one company still appears to be driving at its finest. Porsche AG revved up 3% to €85 per share during its first trading session in Frankfurt, after parent Volkswagen AG (OTCPK:VWAGY) set the final price for the sports-car maker at the top end of its €76.50-€82.50 marketed range. The listing values Porsche at some €75B, making it Europe’s largest initial public offering in a decade despite many challenging market conditions.
Bigger picture: As part of the listing (and a nod to its well-known vehicle line), 911M Porsche shares were divided into 455.5M preferred shares and 455.5M ordinary shares. Only a quarter of the preferred, non-voting shares were sold, while a holding company controlled by the Porsche and Piech families bought 25% of the company – with voting rights – giving them a majority that could halt major strategic decisions implemented by the carmaker’s board. Investors in the IPO also included the sovereign wealth funds of Qatar, Abu Dhabi and Norway, as well as mutual fund company T. Rowe Price.
Volkswagen (OTCPK:VWAGY), which will retain a 75% stake in Porsche, is set to raise €19.5B from the IPO. The parent firm plans to distribute nearly half of the proceeds to VW shareholders in the form of a special dividend, while the remaining amount will pave the way for its EV transition and investments in software. In terms of earnings, Porsche recorded a €4B profit last year, on revenue of €33.1B.
Engineered for magic: Porsche hired Italian investment bank Mediobanca – which took Ferrari (NYSE:RACE) public in 2015 – as a financial advisor for the IPO. While the two companies are in the luxury auto business, Ferrari has exclusively focused on expensive sports cars as Porsche expands into the more affordable market and SUVs. Ferrari is also run independently of its former parent Fiat and the Agnelli family, trading freely on the open market, while only 10% of Porsche’s shares were offered to retail investors, and do not carry any voting rights.
Image and article originally from seekingalpha.com. Read the original article here.