Investors are rushing to snap up shares in Porsche with the German sports car maker on course to deliver one of Europe’s biggest initial public offerings this Wednesday.
Owner Volkswagen expects to raise €9.4bn with the sale of 12.5 per cent of the company’s non-voting shares to outside investors as Porsche is set to price at the top of its range of €76.50 to €82.50 a share.
This would value the Stuttgart-based group at €75.2bn, and make it Germany’s second largest listing after Deutsche Telekom’s $13bn IPO in 1996, at the time Europe’s largest ever.
A term sheet for the deal on Monday said orders below the top price would miss out on allocation, following overwhelming appetite from investors as they brush aside concerns over the company’s complex governance.
The listing will fulfil a long-held desire from the German auto titan to try and emulate the success of Ferrari’s 2015 flotation, and help fund its push into electric cars and software.
VW will sell 911mn shares in Porsche, a number picked because it emulates the name of the brand’s flagship model — and the only car in its line-up it has vowed not to turn electric.
The company has previously said it will use almost half of the proceeds to pay a one-off special dividend; the remainder will be allocated to help fund the transition to battery technology.
Listing shares in Porsche is intended to help VW raise money to invest in electric vehicles and its push into developing software as it tries to catch up with Tesla.
Former chief executive Herbert Diess, who was ousted this year, had set an aim for the German group to pass Tesla in electric car sales by 2025.
Daniela Cavallo, the head of VW’s powerful works council, told the Financial Times last week that the carmaker might sell more shares in future, in order to raise additional funds if needed.
Advisers to VW say the group may also in future seek to list other parts of the company, including its battery business, the Ducati bike name and possibly Lamborghini or Bugatti-Rimac in the longer term.
In floating Porsche, VW was banking on the brand being able to achieve a financial valuation higher than most auto brands, giving it the “luxury” status that Ferrari enjoys.
Advisers have pitched the business as operating in Ferrari’s segment, while also offering the backing of an automotive titan, helping it get the scale benefits of a large carmaker.
Potential investors raised concerns over the company’s links with VW, including the control that the group has over Porsche and its potential reliance on the parent company for software and other technology.