Volkswagen is targeting a valuation of up to 75 billion euros ($75.1 billion) for luxury sports car maker Porsche, it said on Sunday, in what would be Germany’s second-largest initial public offering (IPO) in history.
Volkswagen ( VLKAF ) will price preferred shares in the initial public offering of Porsche AG at 76.50 euros to 82.50 euros per share, the automaker said, translating to a valuation of 70 billion to 75 billion euros.
At the upper end of the range, first reported by Reuters, it would be Europe̵[ads1]7;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 IPO, 911 million Porsche AG shares will be divided into 455.5 million preference shares and 455.5 million ordinary shares. Up to 113,875,000 preference shares, without voting rights, will be placed with investors during the IPO.
The sovereign wealth funds of Qatar, Abu Dhabi and Norway as well as the fund company T. Rowe Price will subscribe up to 3.68 billion euros in preferred shares as cornerstone investors, in the upper part of the valuation, Volkswagen said.
“We are now on track with the IPO plans for Porsche and welcome the commitment of our cornerstone investors,” said Volkswagen CFO and COO Arno Antlitz.
In line with Volkswagen’s agreement earlier in September with its largest shareholder Porsche SE, 25% plus one ordinary share in the sports car brand, which has voting rights, will go to Porsche SE at the price of the preferred shares plus a premium of 7.5%.
Porsche SE, the holding company controlled by the Porsche and Piech families, will finance the acquisition of the ordinary shares with debt capital of up to 7.9 billion euros, it said in a separate statement.
Total proceeds from the sale will be 18.1 billion to 19.5 billion euros. If the IPO goes through, Volkswagen will call an extraordinary shareholder meeting in December where it will propose paying 49% of the total proceeds to shareholders in early 2023 as a special dividend.
A stock exchange prospectus is expected to be published on Monday, after which institutional and private investors can subscribe to Porsche shares.