Volkswagen’s supervisory board will meet on Sunday to advance the initial public offering (IPO) of its Porsche brand, which will comprise 911 million shares in a nod to its most famous model, two sources familiar with the matter said.
Details on the price range, valuation and confirmed key investors are likely to be announced after the meeting, a third source said.
Porsche AG’s 911 million shares will be divided into 455.5 million preferred shares and 455.5 million common shares, according to the website for the listing of shares. Only preferred securities will be listed.
Porsche, Volkswagen’s main shareholder, has already agreed to buy 25% plus one of the common shares at a 7.5% premium over the preferred shares.
Meetings with investors are due to be completed by this Friday, multiple sources said, giving senior executives time to hold discussions over the weekend before opening the bookmaking process early next week.
A prospectus is due to be published on Monday, the sources said, after which institutional and private investors can subscribe to Porsche shares.
Volkswagen and Porsche declined to comment.
Investor interest in the IPO remains strong, two of the sources said, despite raised governance concerns regarding Oliver Blume’s dual role as chief executive of Volkswagen and Porsche.
Porsche’s valuation is likely to be between $70 billion and $80 billion, one of the sources said, downplaying an HSBC analyst note this week that valued the sports car maker at a much lower $44.5 billion. million and 56.9 billion euros.
But nothing is certain while the process is ongoing, that source added. “It’s at a point where it could go either way,” he said, noting the strong reaction in markets this week to a slight deviation from expectations in US inflation data.
“You have to be careful. There are still pitfalls if the market continues to fall,” the source added. But because of the major investors involved, Porsche is confident of reaching a valuation of between $70 billion and $80 billion, the source said.
At the high end of estimates, Porsche’s valuation would still be lower than luxury carmaker Ferrari’s in benchmark measures, though higher than some other high-end automakers, according to bankers working on the deal. .
A valuation of $65 billion to $85 billion would correspond to an enterprise value of 8.5 to 11.3 times Porsche’s forecast earnings before interest and taxes by 2023, and a price-to-earnings (PE) ratio of 12.6 to 16.5, one banker said. involved in the deal.
Ferrari currently trades at a PE ratio of 35 for 2023 estimates, according to Refinitiv data, but Mercedes-Benz and BMW trade between 4.5 and 5 times on the same basis, the data show.