Porsche to buy yet more of VW

[Lateknight]

Porsche want to increase their stake in VW group from 27.3% to 31%.

They will apparently start buying shares on Monday but offering just over 100 euros a share, instead of the market rate of 117.50 a share.

I think their looking to scoop up some very small private holdings (who must be desperate to sell at nearly 15% below marketable value). :doh:

This has gone well past protecting their own interest in the group.

I wonder whats in store ? :vgrumpy:

[Benman]

Read/heard the same thing! I'm starting to wonder who this will really benefit?

Ben:addict:

[Leadfoot]

I was under the impression that if they incresed over the 29.9% mark they had to make a takeover bid.

[Lateknight]

I was under the impression that if they incresed over the 29.9% mark they had to make a takeover bid.

Not sure if they can get round this by only offering a formal bid to buy shares at 85% of the current share value. Therefore hoping that only a small minority of current (private) shareholders weaken and sell to Porsche.

I just want to know what their gameplan is?

[Lateknight]

I read this somewhere - sounds plausible.
Porsches stake (31%) + State of Lower Saxonys stake (20%) = 51% = controlling share of VW. Preventing hostile takeover from any other party.

Porsche need VW as working partner. SoLS need VW for local economy.

Everybodys happy. :)

Anybody know what made Porsche buy up VW shares in the first place. Where there any other companies looking to buy Volkswagen (or part of it) last year?

I wonder if Porsche might have been a little worried about VWs and Mercedes/Chrysler working relationships.

1./ VW have supplied engines for the old shape V-class (2.8 vr6)

2./ VW and Mercedes have had a partnership for light commercial vehicles since 1996 (VWs LT/Crafter and the Merc Sprinter are 90% the same vehicle).

3./ VW supply their 138ps 2.0 TDi to Chrysler for the Dodge Avenger (aswell as a current agreement to supply Mitsubishi with the same engine - a deal done a couple of years ago - just before Mercedes elbowed Mitsubishi).

4./ The new BlueTec agreement with Daimler Chrysler regards Euro 5/6 emission complient engines (tier 2 / bin 5 compliant).

Quite a cosy relationship considering they are competing with each other in almost all market sectors.

[Leadfoot]

EVO Magazine
More impressively and encouragingly, what will rattle Porsche is the R8’s dynamic ability and mouth-watering desirability. With 911-matching everyday driveability, superior power and pace, similar polish and, when compared with the all-wheel-drive C4S, more progression and ultimately more entertainment, Porsche’s pride is in danger of being hurt. We need to drive the R8 back-to-back with a 911 and a V8 Vantage on UK roads before we can give a definitive judgement, but on the evidence of our drive through the land of the fake, the R8 is unquestionably the real deal.


Is there any more of a reason for why Porsche has bought so heavily into VAG. Maybe Porsche wants to control the volumes that Audi could ultimately sell which if to many would in turn hurt the 997 sales and the Porsche brand name as a whole.

[Lateknight]

Its a good point.
I does make me wonder if there is a lot of truth there. Its not only the R8 that Porsche could be keeping an eye on.
Will Porsche curtail development of other models lower down the range?

-possible boardroom wrangles-
"Your RS6 has too much horsepower compared to our Panamera please reduce it or we will vote to kill it off!"

"No more than 280 horsepower for the TT please, it is affecting our Caymen sales. Please dump any remaining Tfsi R5 engines in the metal recycler outside"

"Your wonderfull V12tdi engine will appear in our Cayenne first. It wont appear in the Q7 until 6 months after Porsche introduce it, and the Audi version will only have 450ps- oh and by the way we WILL claim its OUR own engine, and you will have to let us have it for free !! (cue: manic laughter)"

I would love to be in the same room as Bernd Pischetsrieder, Wolfgang Bernard and Thomas Bscher, just to let them voice their opinions on the matter. (even though these were largely Volkswagen ex-employees and not Audis) :eye:

[Erik]

Maybe Porsche HAS to buy VW so they can incorporate their CO emissions from their sportscars into the Volkswagens?

[Lateknight]

Maybe Porsche HAS to buy VW so they can incorporate their CO emissions from their sportscars into the Volkswagens?

Wiedeking has been getting stressed out over this just recently.

This would mean the rest of the group would have to compensate for 'Dirty' Porsche. Less performance models from Audi. Don't like that idea.

Could get Seat to build a load of Toledos with no engine. The worlds first zero emmission car :wo: I'm sure they would sell just as well all the other Toledos :lovl:

I thought Porsche were just going to ignore the new limits and pay the EU fines. Its probably cheaper that way. Its hard enough for normal car manufacturers to achieve the new limits, never mind Porsche.

[QuattroFun]

So Porsche has now launched a formal takeover bid for VW at the legal minimum price for the record and will thus not get it at 10% discount to the current share price - now it increase its ownership further without bidding again if it does want to

[Lateknight]

State of lower Saxony have not ruled out increasing their current 20% stock holding in Volkswagen either.

Porsche have stated they have no interest to increase their share in Volkswagen past 31%. Yeah! I've heard that statement a couple of time from Porsche before.

Turns out that Porsche have secured a credit deal worth 35 billion euros just in case they do wish to purchase more of the company.
Thats enough credit to purchase the rest of the company if they could.
Volkswagen was recently valued at over 42 billion euros at the end of last week. Probably worth a bit less now as the shares have taken a knock for 3 days consecutively.

[SoCal]

Porsche is raising its stake to 31% to keep VW in German hands. Given that the offer is structured economically to meet German mandatory tender laws without resulting in the compulsory purchase of all of the outstanding shares, this is really not a significant change in the control of the company since Porsche aquired its initial large stake of VW shares a couple of years ago.

This is certainly not being done out of any parochial desire by Porsche to hinder the development of Audi models. Too much money is at stake for that to explain it.

In short, (1) Porsche needs the economies of scale that VW offers for R&D, especially as Porsche expands out of its traditional sports car niche into new model lines, (2) VW benefits by buying more time to continue its surprisingly successful recent restructuring efforts (led by Audi) without being acquired by either a large foreign automaker or by private equity funds that would break it up into pieces, (3) Germany and the Lower Saxony state government want to protect local jobs, and (4) at least as important, family ties run deep.

The recent press on this has gotten it about right. For example, from the FT via AP:

'In its statement, Porsche said it was seeking the larger stake as a response to fears that European Union judges will force the German government to repeal its law blocking a foreign takeover of Volkswagen, which is partly owned by the state of Lower Saxony and is looked to as both an industrial powerhouse and a major provider of jobs. It cited the Feb. 13 opinion of EU Advocate General Damaso Ruiz-Jarabo Colomer, who said the German government's regulation that limits any shareholder's voting rights to 20 percent was "not based on overriding reasons relating to the public interest."

The EU took Germany to court over the issue in 2005; the advocate's opinions are not binding on EU judges but the union's highest court follows them roughly 80 percent of the time. Porsche said it assumed "that the European Court of Justice would confirm the invalidity of the VW law and so cause the German government to change or abolish this law."

...Volkswagen's board chairman and former CEO, Ferdinand Piech, is a member of the family that controls Porsche. He is the grandson of Ferdinand Porsche, the designer of VW's original Beetle model, and the Porsche and Piech families own more than half of Porsche's stock and voting shares.'

This is pure business, not a conspiracy to deprive Audi of brand excellence. Indeed, by increasing its stake, Porsche will have even more incentive to ensure Audi's success and will be free to create even more profitable niche models using the combined companies' R&D platform (hybrid engines, DSG, manufacturing processes, and so forth). It's a win-win, if they can somehow manage to improve their cost structure.

[roadrunner]

SoCal - exactly what i wanted to say - was being little bit tied up with my other posts :hihi:

One addition - Porsche and the state of lower saxony now owne combined more than 50 % of VW (Porsche 31% + 20% lower saxony)

And state of lower saxony already hinted, that it might increase its stake above 25%.

We had this discussion couple of months ago, and there were opinions, that porsche is persuing the plan to break up the VW group and to sell Audi.

I did not not think so then, and the signs we see here are certainly not hinting in that direction, quite to contrary.

I think Audi has further a bright future.:)

greetings
seb.

[Benman]

This is pure business, not a conspiracy to deprive Audi of brand excellence. Indeed, by increasing its stake, Porsche will have even more incentive to ensure Audi's success and will be free to create even more profitable niche models using the combined companies' R&D platform (hybrid engines, DSG, manufacturing processes, and so forth). It's a win-win, if they can somehow manage to improve their cost structure.

:cheers: This is starting to seem to most plausable result. We should all win in the end. Well, maybe not the other manufactures. ;)

Ben:addict:

[Lateknight]

...It's a win-win, if they can somehow manage to improve their cost structure.
Nice post. :thumb:
I'm usually a "glass is half empty" guy. Hence my previous post(s) might appear a little negative towards Porsches real intentions.
They have investing a LOT of money so far in Volkswagen/Audi, so it would be financial suicide to mess too much with what appears to be one of only a few remaining profitable car companies.
I just hope that the strive to make VW/Audi more profitable does not come at the expense of quality or diversity of models. (Even though Porsche have stated they wish to improve quality - I hope they have that magic touch.)

Could be an interesting 3 or 4 years.

[Leadfoot]

Nice post. :thumb:
I'm usually a "glass is half empty" guy. Hence my previous post(s) might appear a little negative towards Porsches real intentions.
They have investing a LOT of money so far in Volkswagen/Audi, so it would be financial suicide to mess too much with what appears to be one of only a few remaining profitable car companies.
I just hope that the strive to make VW/Audi more profitable does not come at the expense of quality or diversity of models. (Even though Porsche have stated they wish to improve quality - I hope they have that magic touch.)

Could be an interesting 3 or 4 years.

I remember saying as much a few months ago, I glad others agree.

Has anyone though that this is one way to improve Porsche's profits, they have tried to kill off the 911 on numerous occasions and failed and now every car they produce retails less than it. If they can't keep improving the 911 to stay competitive then doing so through an Audi R8 might be another option for them. Has anyone wondered how much possibly input Porsche has provided in the R8 if any.;)

But I still think we will see more Porsches crossing into differing markets like smaller SUVs, small saloons and possibly a hatchback. I for own would love to own a Porsche hothatch.:jlol:

[Lateknight]

Are you referring to Porsche killing off the 911 (its got to happen one day) and basing a successor on the R8/Gallardo ? Perhaps a lightweight version included (a'la GT3). Which of course would probably mean a RWD version...sorry Leadie:360:
It would not be surprised if Porsche were at least technically consulted on R8 development. I'm sure they have at least been consulted or learned from on every fast Audi since the RS2.

Just how much would a supposed Porsche hatchback cost? :vhmmm:
Probably not far off Boxster money. :cry: