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| Sale imminent as VW feud nears end: Porsche CEO |
| Bloomberg / Ingolstadt Jul 18, 2009, 00:59 IST |
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Porsche SE, the sports-car maker that may merge with Volkswagen AG, is likely to reach an agreement on a stake sale in a few days, Chief Executive Officer Wendelin Wiedeking said in an interview.
“I think all the details, later on within the next days” will be resolved, Wiedeking told Bloomberg Television last night when asked whether Porsche will be sold to Volkswagen. “It’s already on the table,” he said in Ingolstadt, Germany, where he attended a 100th anniversary celebration for VW’s Audi division. Porsche is also considering an offer by the Qatar Investment Authority to buy a stake in Porsche’s holding company and options on Volkswagen stock. Stuttgart-based Porsche is considering ways to reduce more than ¤9 billion ($12.7 billion) in debt after amassing a 51 per cent stake in VW as well as the options for 20 per cent of the Wolfsburg-based carmaker, Europe’s largest.
“The most reasonable solution would be that Porsche sells its call options on Volkswagen shares to Qatar and Volkswagen acquires a stake or 100 per cent of Porsche’s car business,” said Juergen Meyer, a portfolio manager at SEB Asset Management in Frankfurt. Such a deal “would make Porsche Holding free of debt and still owning 51 per cent plus of Volkswagen shares.”
Porsche’s power struggle with Volkswagen appears to be “over,” Lower Saxony state Prime Minister Christian Wulff told reporters as he arrived at the Audi event. Wulff said he’s “very confident of good results” from meetings that Porsche’s and Volkswagen’s supervisory boards plan on July 23.
The sports-car maker’s top labour leader said that Volkswagen must double its offer for a 49 per cent stake in Porsche’s automotive unit. The “exact correct price” is ¤7 billion to ¤8 billion, Uwe Hueck, head of Porsche’s works council, said in an interview with Germany’s ZDF television July 15. “The ¤4 billion will not even suffice. We also need liquidity.”
Hueck, who is Porsche’s deputy chairman, said he’s “against raiding Volkswagen’s coffers” for the sake of erasing debt. He said the Porsche and Piech families, who control all voting rights on Porsche shares, should take part in a ¤5 billion capital increase and pave the way for Qatar to buy a stake and the VW options. Wiedeking will remain at the helm “for as long as his contract permits, and that’s until 2012,” Hueck said. German weekly magazine WirtschaftsWoche has reported that the CEO will step down.
“I’m the chief executive officer,” Wiedeking said in Ingolstadt. “I bear responsibility for this company and I’m feeling happy as a cat in that role.” Wiedeking transformed the manufacturer of the 911 and the Cayenne, almost bankrupt when he became CEO in 1993, into the automaker with the industry’s highest profit margins. In 2005, he began using cash from the luxury-vehicle business to acquire shares of Volkswagen, a company that builds more cars in a week than Porsche does in a year.
Qatar and the family owners have been asked to participate in a planned ¤5 billion share sale at Porsche, people familiar with the talks said this week. Qatar may pay ¤2 billion for a stake, one of the people said.
At the same time, Porsche may hand over the options that can be converted into a 20 per cent stake in VW to Qatar for free, the people have said. Qatar would then pay about ¤5 billion to banks that sold Porsche the derivatives, they said.
An investment by the Persian Gulf state may give Wiedeking, 56, leverage to negotiate a deal to merge with VW.
The families agreed in May with VW to pursue a merger to create a 10-brand behemoth that would include the Audi luxury division of VW as well as the Seat and Skoda mass-market units. Wulff, the regional government leader, said July 14 that Lower Saxony would welcome Qatar as a “third strong shareholder” in VW. Lower Saxony is Volkswagen’s home state and the carmaker’s second-biggest shareholder, with a 20 per cent stake and the power to veto decisions.
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