Porsche AG’s valuation sent Volkswagen shares up 3% in pre-market trading

Porsche AG’s valuation sent Volkswagen shares up 3% in pre-market trading

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BERLIN (Reuters) – Volkswagen shares rose 3 percent in premarket trading on Monday, outpacing Germany’s blue-chip index after the automaker said on Sunday it was targeting a valuation of the luxury sports car brand Porsche at up to 75 billion. Euros ($74.84 billion).

Shares of Porsche Holdings Inc., the largest shareholder in Volkswagen, rose 2.7%.

Volkswagen announced Sunday night that it will price float preferred shares in Porsche AG at โ‚ฌ76.50 to โ‚ฌ82.50 per share, translating into Germany’s second largest initial public offering in history.

A prospectus with more details about the listing is expected on Monday afternoon.

In line with Volkswagen’s agreement earlier in September with the Porsche SE, 25% plus one ordinary stake in the sports car brand, which holds voting rights, will go to Porsche SE at the preferred stock price plus a 7.5% premium.

It said in a separate statement that Porsche will finance the acquisition of common shares with debt capital of up to 7.9 billion euros.

Total sale proceeds will range between 18.1 billion and 19.5 billion euros. Once the IPO goes ahead, Volkswagen will call an extraordinary shareholder meeting in December at which it will propose paying 49% of total proceeds to shareholders in early 2023 as a special dividend.

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(1 dollar = 1.0021 euros)

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