Porsche being sold to VW???
05-03-2009, 01:00 PM
#1
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Thread Starter
Porsche being sold to VW???
This is a little difficult to understand!!
FRANKFURT (Reuters) – Wolfgang Porsche, head of the supervisory board of Porsche and patriarch of one of its two controlling families, said the carmaker will not be sold to Volkswagen (VOWG.DE).
Media reports have said the Porsche and Piech families are set to make a decision on Wednesday over a possible sale of Porsche AG to Europe's largest automaker. They are trying to find ways to reduce the huge debt of Porsche's holding company.
"We are currently on the right path. Porsche AG will not be sold to Volkswagen," Porsche told the Frankfurt Allgemeine Sonntagszeitung (FAS) in an article to be published on Sunday.
The statement from the head of the Porsche clan appears to put him on a crash course with his cousin Ferdinand Piech, who advocates a sale of Porsche to VW.
According to articles in Spiegel and Wirtschaftswoche, Piech backs the VW option that would effectively wipe clean the debts of both the Piech and Porsche families, who control all the votes in Porsche Automobil Holding SE (PSHG_p.DE).
In addition, Piech suggested Porsche should replace its chief executive, Wendelin Wiedeking, and Chief Financial Officer Holger Haerter with VW CEO Martin Winterkorn and VW CFO Hans Dieter Poetsch.
Wirtschaftswoche said the sale could be worth around 11 billion euros.
TOUGH DECISION
Porsche Automobil, which has spent about 23 billion euros to gain control of a nearly 51 percent stake in Volkswagen, has said it plans to raise its VW voting stake to 75 percent as early as this year should economic conditions allow.
At the end of January, Porsche had racked up debt of 16.2 billion euros, mostly stemming from its purchase of VW stock.
According to the FAS, Wolfgang Porsche has voiced support for a plan proposed by Wiedeking in which Porsche and VW would be merged under a new holding company that Wiedeking would then run.
Sketching a similar scenario, Wirtschaftswoche said Porsche's debt could be paid off through a capital increase and the large shareholding families would have the finances at their disposal to preserve Porsche's independence. The report did not cite sources.
Wiedeking's plan would most likely see Porsche give up its ambitions to raise its stake in VW to 75 percent in order to secure profit-transfer and controlling agreements.
The rising cost of debt has caused Porsche to consider alternative ways of raising money over the long term, including selling assets, people familiar with the matter have told Reuters.
The sources said the two families could sell assets other than Porsche AG if Porsche Automobil needed additional funding.
(Reporting by Tyler Sitte; editing by Robert Woodward)
FRANKFURT (Reuters) – Wolfgang Porsche, head of the supervisory board of Porsche and patriarch of one of its two controlling families, said the carmaker will not be sold to Volkswagen (VOWG.DE).
Media reports have said the Porsche and Piech families are set to make a decision on Wednesday over a possible sale of Porsche AG to Europe's largest automaker. They are trying to find ways to reduce the huge debt of Porsche's holding company.
"We are currently on the right path. Porsche AG will not be sold to Volkswagen," Porsche told the Frankfurt Allgemeine Sonntagszeitung (FAS) in an article to be published on Sunday.
The statement from the head of the Porsche clan appears to put him on a crash course with his cousin Ferdinand Piech, who advocates a sale of Porsche to VW.
According to articles in Spiegel and Wirtschaftswoche, Piech backs the VW option that would effectively wipe clean the debts of both the Piech and Porsche families, who control all the votes in Porsche Automobil Holding SE (PSHG_p.DE).
In addition, Piech suggested Porsche should replace its chief executive, Wendelin Wiedeking, and Chief Financial Officer Holger Haerter with VW CEO Martin Winterkorn and VW CFO Hans Dieter Poetsch.
Wirtschaftswoche said the sale could be worth around 11 billion euros.
TOUGH DECISION
Porsche Automobil, which has spent about 23 billion euros to gain control of a nearly 51 percent stake in Volkswagen, has said it plans to raise its VW voting stake to 75 percent as early as this year should economic conditions allow.
At the end of January, Porsche had racked up debt of 16.2 billion euros, mostly stemming from its purchase of VW stock.
According to the FAS, Wolfgang Porsche has voiced support for a plan proposed by Wiedeking in which Porsche and VW would be merged under a new holding company that Wiedeking would then run.
Sketching a similar scenario, Wirtschaftswoche said Porsche's debt could be paid off through a capital increase and the large shareholding families would have the finances at their disposal to preserve Porsche's independence. The report did not cite sources.
Wiedeking's plan would most likely see Porsche give up its ambitions to raise its stake in VW to 75 percent in order to secure profit-transfer and controlling agreements.
The rising cost of debt has caused Porsche to consider alternative ways of raising money over the long term, including selling assets, people familiar with the matter have told Reuters.
The sources said the two families could sell assets other than Porsche AG if Porsche Automobil needed additional funding.
(Reporting by Tyler Sitte; editing by Robert Woodward)
05-03-2009, 02:06 PM
#2
It's brilliant actually, IMHO.
The Porsche and Piech family wants to control Volkswagen completely and by using their majority ownership votes in Volkswagen to force Volkswagen to buy Porsche they end up with more shares and more cash to buy the remaining shares of Volkswagen that they don't own.
Porsche stays whole and separate in name and Porsche becomes the decision makers of the entire operation due to the majority stake of shares they owned before the sale.
It's friggin' brilliant.
The Porsche and Piech family wants to control Volkswagen completely and by using their majority ownership votes in Volkswagen to force Volkswagen to buy Porsche they end up with more shares and more cash to buy the remaining shares of Volkswagen that they don't own.
Porsche stays whole and separate in name and Porsche becomes the decision makers of the entire operation due to the majority stake of shares they owned before the sale.
It's friggin' brilliant.
05-03-2009, 02:31 PM
#4
Rennlist Member
Thread Starter
It's brilliant actually, IMHO.
The Porsche and Piech family wants to control Volkswagen completely and by using their majority ownership votes in Volkswagen to force Volkswagen to buy Porsche they end up with more shares and more cash to buy the remaining shares of Volkswagen that they don't own.
Porsche stays whole and separate in name and Porsche becomes the decision makers of the entire operation due to the majority stake of shares they owned before the sale.
It's friggin' brilliant.
The Porsche and Piech family wants to control Volkswagen completely and by using their majority ownership votes in Volkswagen to force Volkswagen to buy Porsche they end up with more shares and more cash to buy the remaining shares of Volkswagen that they don't own.
Porsche stays whole and separate in name and Porsche becomes the decision makers of the entire operation due to the majority stake of shares they owned before the sale.
It's friggin' brilliant.
05-03-2009, 02:33 PM
#5
Exactly. And they will, too. It's friggin' beautiful. Bloomberg sums it best.http://www.bloomberg.com/apps/news?p...d=aUp8sH95gJq8
05-03-2009, 02:41 PM
#6
Rennlist Member
Thread Starter
Exactly. And they will, too. It's friggin' beautiful. Bloomberg sums it best.http://www.bloomberg.com/apps/news?p...d=aUp8sH95gJq8
It is brilliant!! I stand corrected.
05-03-2009, 03:41 PM
#7
http://www.reuters.com/article/wtUSI...5411AW20090502
Last edited by JohnnyBahamas; 05-03-2009 at 05:41 PM.
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05-03-2009, 08:55 PM
#8
Three Wheelin'
At the end of January, Porsche had racked up debt of 16.2 billion euros, mostly stemming from its purchase of VW stock.
The rising cost of debt has caused Porsche to consider alternative ways of raising money over the long term, including selling assets, people familiar with the matter have told Reuters.
(Reporting by Tyler Sitte; editing by Robert Woodward)
The rising cost of debt has caused Porsche to consider alternative ways of raising money over the long term, including selling assets, people familiar with the matter have told Reuters.
(Reporting by Tyler Sitte; editing by Robert Woodward)
but this writer makes zero sense in stating "The rising cost of debt".
cost of funds is down . . . the problem is the slowing sales to service the debt, even with the lower cost of funds.
and the controlling families are divided . . . well, at least ferdy P.
this'll make a good movie some day
05-04-2009, 07:30 AM
#10
Three Wheelin'
05-05-2009, 02:24 AM
#11
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Whoa! Props to you boarder. You called it. Doing my weekend read of Reuters and I find this from yesterday. Looks like there's going to be some fireworks on Wednesday.
http://www.reuters.com/article/wtUSI...5411AW20090502
http://www.reuters.com/article/wtUSI...5411AW20090502
There was another article on this today in FI - I will post link tommorrow when at the office. Definately will be some fireworks Wednesday. Seems a little family competition has led to a lot of debt at Porsche and some issues at VW as well. Should be interesting how this plays out.
Hopefully it will not be the end of Porsche!
JCM
05-07-2009, 02:07 PM
#12
Porsche and VW to merge:
http://news.bbc.co.uk/1/hi/business/8036748.stm
http://www.guardian.co.uk/business/2...porsche-merger
It seems that Piech, the chairman of VW is the big winner.
http://news.bbc.co.uk/1/hi/business/8036748.stm
http://www.guardian.co.uk/business/2...porsche-merger
It seems that Piech, the chairman of VW is the big winner.
05-09-2009, 05:20 AM
#14
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This is what happens when you run a car copmany like a hedge fund and then run out of ability to service your debt. Wiedeking is an idiot for getting the company in such a position.
05-09-2009, 01:10 PM
#15
Porsche VW Explore Merger Under One Brand - Plans of VW Takeover Halted
The two German automakers will form a single automotive company with 10 brands
by Alex Ricciuti
May 7, 2009 3:40 PM
Filed Under: Corporate/Financial, German, Porsche, Volkswagen
It appears Porsche Automobil Holding SE is shelving its plan for a takeover of Volkswagen Group and is trying another approach at forming some sort of merger with Wolfsburg-based VW Group.
The two German automakers have formed a working group at VW headquarters in Wolfsburg to work out the details for a merger. The VW-Porsche working group is made up of representatives from both automakers, as well as from worker councils and the state of Lower Saxony, where VW Group is based, which owns a 20 percent stake in VW giving it veto power over all strategic decisions.
The working group has not released many details about the plan, but say they have come up with a blueprint that both parties have agreed to. The two automakers will form a single automotive company with 10 brands, including Porsche, which Porsche Holding currently operates on its own. VW Group consists of 9 brands which include Audi, Seat, Skoda, Scania, Lamborghini, Bentley, Bugatti, VW Commercial Vehicles and Volkswagen passenger cars.
Porsche has run up a debt of over 9 billion euros in buying up VW stock in its attempted takeover. It holds a 51 percent share of VW and had earlier planned to take that share to 75 percent but has now set that goal aside. According to Reuters' sources, Porsche will inject 5 billion euros into the new company upon its formation in 2009 or 2010. It is not clear yet whether Porsche Automobil Holding SE will still remain a separate company.
Source: Autonews
The two German automakers will form a single automotive company with 10 brands
by Alex Ricciuti
May 7, 2009 3:40 PM
Filed Under: Corporate/Financial, German, Porsche, Volkswagen
It appears Porsche Automobil Holding SE is shelving its plan for a takeover of Volkswagen Group and is trying another approach at forming some sort of merger with Wolfsburg-based VW Group.
The two German automakers have formed a working group at VW headquarters in Wolfsburg to work out the details for a merger. The VW-Porsche working group is made up of representatives from both automakers, as well as from worker councils and the state of Lower Saxony, where VW Group is based, which owns a 20 percent stake in VW giving it veto power over all strategic decisions.
The working group has not released many details about the plan, but say they have come up with a blueprint that both parties have agreed to. The two automakers will form a single automotive company with 10 brands, including Porsche, which Porsche Holding currently operates on its own. VW Group consists of 9 brands which include Audi, Seat, Skoda, Scania, Lamborghini, Bentley, Bugatti, VW Commercial Vehicles and Volkswagen passenger cars.
Porsche has run up a debt of over 9 billion euros in buying up VW stock in its attempted takeover. It holds a 51 percent share of VW and had earlier planned to take that share to 75 percent but has now set that goal aside. According to Reuters' sources, Porsche will inject 5 billion euros into the new company upon its formation in 2009 or 2010. It is not clear yet whether Porsche Automobil Holding SE will still remain a separate company.
Source: Autonews