Skip to main content
Sister Publication Links
  • Automotive News
  • Automobilwoche
  • Automotive News Canada
  • Automotive News China
Subscribe
  • Subscribe
  • Newsletters
  • Login
  • HOME
    • Latest news
    • Automakers
    • Suppliers
    • New Product
    • Environment/Emissions
    • Sales By Market
    • On The Move
    • Auto Shows
    • Munich Auto Show
    • Geneva Auto Show
    • Paris Auto Show
    • Beijing Auto Show
    • Shanghai Auto Show
  • Features
    • Long Read
    • Interview of the Month
    • Focus on Electrification
    • Focus on Technology
    • Segment Analysis
    • Cars & Concepts
    • Supplier Spotlight
    • Europe By The Numbers
  • Opinion
    • Blogs
    • Commentary
    • Guest columnists
  • Photos
    • Photo Galleries
    • Geneva Photo Gallery
    • Beijing Photo Gallery
    • Frankfurt Photo Gallery
    • Paris Photo Gallery
    • Shanghai Photo Gallery
  • Podcasts
  • Car Cutaways
  • EVENTS
    • ANE Congress
    • ANE Rising Stars
    • ANE Eurostars
  • More
    • Publishing Partners
    • Social Media
    • Contact Us
    • Media Kit
    • About Us
    • Capgemini: Invent Head on automotive takeaways from CES 2023
    • Capgemini: Securing the industry's future through a radical rethink
    • Capgemini: Succeeding with the automated driving journey through AI
    • Capgemini: The circular economy is spurring new thinking on EV batteries
    • Capgemini: Toyota and Capgemini leaders on how OEMs can handle industry changes and succeed
    • HEXAGON: Plugging into data is the only way to make winning EVs
    • TUV Rheinland: Ideas, services and certifications for smart mobility
    • TUV Rheinland: Testing of automated and autonomous vehicles on test tracks
    • Toyota Europe
    • UFI Filters
    • Facebook
    • Instagram
    • LinkedIn
    • Twitter
MENU
Breadcrumb
  1. Home
  2. Automakers
July 20, 2022 08:10 AM

Porsche faces uphill drive in race to public listing

Porsche may have to go public at a steep discount if it insists on going ahead as economic obstacles mount.

Reuters
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print
    porsche lgo new web.jpg

    LONDON -- Porsche may have to go public at a steep discount if it insists on going ahead as economic obstacles mount, two people involved in the landmark multi-billion-euro listing said.

    The prospect of a larger than customary discount would be a setback to the controlling Porsche and Piech families pushing the initial public offering to fund a costly makeover from gasoline- to electric-driven sports cars.

    Original expectations have been high for the brand, owned by Volkswagen Group. Some had valued Porsche at more than 80 billion euros ($81.89 billion), according to bankers involved.

    Related Article
    Porsche confirms plans for flagship electric SUV
    Porsche's luxury IPO pitch meets investor concern over valuation

    But the people involved said a bigger-than-usual markdown may now be necessary to secure what could be one of the world's largest stock-market debuts - in the face of war, threat of recession and energy shortages.

    Porsche may have to settle for as little as 60 billion euros, one of the people said, noting that the owners would not accept anything less.

    The people shared their assessment, amid a wider debate about the price tag for one of Germany's most prestigious brands unfolding weeks ahead of the expected IPO.

    One of the people said owners of the brand have different views on how highly it should be valued. A third person involved in the preparations said investors had yet to agree on a valuation formula.

    This week, Porsche's top management outlined their business plans to investors.

    Chief Finance Officer Lutz Meschke told journalists the brand was "financially resilient" and "well-prepared for further steps."

    Porsche estimated revenue of more than 38 billion in 2022, up from 33 billion in 2021, despite a 5 percent drop in deliveries in the first six months of this year.

    DAILY NEWSLETTER: Sign up and get the top news of the day in Europe every business weekday.

    Behind the scenes, however, some investors are wavering.

    Last month, Bernstein Research put a wide range of possible valuations on Porsche, from 55 billion euros to 100 billion euros.

    It set the 'fair value' at about 75 billion euros, based on a formula including Earnings Before Interest and Taxes (EBIT), calling Porsche "a great company but not Ferrari" because of the latter's higher margins.

    A top-20 VW shareholder told Reuters it was not keen on the IPO because only a small amount of stock will be sold, giving new shareholders little influence.

    The shareholder, asking not to be named, said Porsche would be better off staying within the VW Group, while the IPO would not "create value" in the long term.

    Earlier this week, Porsche CEO Oliver Blume and Meschke were upbeat in their presentations.

    Business was robust during the pandemic, Blume said. "There is big need in the capital markets and a lot of money to invest."

    Bankers running the deal intend to survey market conditions at the end of August, with a Porsche board decision and an intention to float (ITF) document potentially set for publication soon after, and a view to trading on the Frankfurt Stock Exchange at the turn of the third to fourth quarter, the people said.

    A spokesperson for Porsche said there had been no "new decisions" on its IPO plans, while Volkswagen declined to comment.

    Electric switch

    The listing is happening as Germany's automakers seek to loosen the bond with the diesel and gasoline engines that won global acclaim and shift towards quieter, cleaner battery models.

    Porsche wants 80 percent of its car sales to be electric by 2030, roughly quadrupling the current level, while VW has also embarked on an ambitious shift toward EVs, batteries and software. The listing is designed to fund that overhaul.

    If the listing does not go ahead or gets through only at a discount, there is less to invest.

    A listing would also shift the balance of power at VW, which has controlled Porsche since a botched takeover attempt of VW more than a decade ago. At the time, the Porsche and Piech families became VW's most influential investors.

    An IPO would win Porsche and its family owners greater control over the brand, the company has said.

    However, the economic hurdles are steep.

    Just $2.3 billion has been raised on German equity capital markets this year, down 90 percent on a year earlier, according to Refinitiv data.

    Only 12.5 percent of Porsche stock will be in 'free float', and European automakers' valuations have plunged since the start of 2022.

    Luxury automakers have been particularly hard hit. Aston Martin's market cap has lost 57 percent of its value since the beginning of 2022, while almost a third has been shaved off Ferrari's valuation.

    One banker involved said Porsche might be compared to highly rated luxury brands, such as French luxury goods house LVMH, but it still remains in the shadow of Tesla.

    RECOMMENDED FOR YOU
    Renault, Nissan will present alliance redesign on Feb. 6
    Recommended for You
    renault nissan web2.jpg
    Renault, Nissan will present alliance redesign on Feb. 6
    6DEFENDER-MAIN_i.jpg
    Jaguar Land Rover adds third Defender shift to meet high demand
    Fearri Purosangue
    Ferrari expects 'even stronger' 2023 with more new models
    Capgemini Invent Head on automotive takeaways from CES 2023
    Sponsored Content: Capgemini Invent Head on automotive takeaways from CES 2023
    Sign up for free newsletters
    EMAIL ADDRESS

    Please enter a valid email address.

    Please enter your email address.

    Please verify captcha.

    Please select at least one newsletter to subscribe.

    You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.

    Get Free Newsletters

    Sign up and get the best of Automotive News Europe delivered straight to your email inbox, free of charge. Choose your news – we will deliver.

    You can unsubscribe at any time through links in these emails. For more information, see our Privacy Policy.

    SUBSCRIBE TODAY

    Get 24/7 access to in-depth, authoritative coverage of the auto industry from a global team of reporters and editors covering the news that’s vital to your business.

    SUBSCRIBE NOW
    Connect with Us
    • Twitter
    • Facebook
    • LinkedIn
    • Instagram

    Founded in 1996, Automotive News Europe is the preferred information source for decision-makers and opinion leaders operating in Europe.

    Contact Us

    1155 Gratiot Avenue
    Detroit MI  48207-2997
    Tel: +1 877-812-1584

    Email Us

    ISSN 2643-6590 (print)
    ISSN 2643-6604 (online)

     

    Resources
    • About us
    • Contact Us
    • Advertise with us
    • Advertise with Us
    • Ad Choices Ad Choices
    • Sitemap
    Awards
    • Rising Stars
    • Eurostars
    • Leading Women
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Automotive News Europe
    Copyright © 1996-2023. Crain Communications, Inc. All Rights Reserved.
    • HOME
      • Latest news
      • Automakers
      • Suppliers
      • New Product
      • Environment/Emissions
      • Sales By Market
      • On The Move
      • Auto Shows
        • Munich Auto Show
        • Geneva Auto Show
        • Paris Auto Show
        • Beijing Auto Show
        • Shanghai Auto Show
    • Features
      • Long Read
      • Interview of the Month
      • Focus on Electrification
      • Focus on Technology
      • Segment Analysis
      • Cars & Concepts
      • Supplier Spotlight
      • Europe By The Numbers
    • Opinion
      • Blogs
      • Commentary
      • Guest columnists
    • Photos
      • Photo Galleries
      • Geneva Photo Gallery
      • Beijing Photo Gallery
      • Frankfurt Photo Gallery
      • Paris Photo Gallery
      • Shanghai Photo Gallery
    • Podcasts
    • Car Cutaways
    • EVENTS
      • ANE Congress
      • ANE Rising Stars
      • ANE Eurostars
    • More
      • Publishing Partners
        • Capgemini: Invent Head on automotive takeaways from CES 2023
        • Capgemini: Securing the industry's future through a radical rethink
        • Capgemini: Succeeding with the automated driving journey through AI
        • Capgemini: The circular economy is spurring new thinking on EV batteries
        • Capgemini: Toyota and Capgemini leaders on how OEMs can handle industry changes and succeed
        • HEXAGON: Plugging into data is the only way to make winning EVs
        • TUV Rheinland: Ideas, services and certifications for smart mobility
        • TUV Rheinland: Testing of automated and autonomous vehicles on test tracks
        • Toyota Europe
        • UFI Filters
      • Social Media
        • Facebook
        • Instagram
        • LinkedIn
        • Twitter
      • Contact Us
      • Media Kit
      • About Us