By Victoria Waldersee and Emma-Victoria Farr
FRANKFURT (Reuters) – Porsche AG made its debut on the stock market on Thursday, with a price tag of about 75 billion euros ($72.45 billion) after Volkswagen (ETR:VOWG_p) priced shares at the top end of the range, braving turbulent market conditions.
The bumper flotation, expected to generate around 19.5 billion euros ($19.0 billion), comes as instability in European markets has deterred other share sales by carmakers, including in luxury brands.
The sale values Porsche AG close to the market capitalisation of its parent Volkswagen, which is worth around 84 billion euros, and puts it ahead of rivals like Ferrari (NYSE:RACE).
Books closed on Wednesday on what is one of Europe’s biggest IPOs and the second largest in Germany since Deutsche Telekom (OTC:DTEGY) made its debut in 1996, at the top end of the 76.50-82.50 euro range it announced earlier this month.
Shares opened at 84.00 euros apiece and traded at 82.88 euros by 0733 GMT.
Shares in Porsche SE fell 5.7% in early Frankfurt trade. Shares in Volkswagen were down 4.9% in early Frankfurt trade.
Companies in continental Europe have raised the smallest amount this year since the 2009 global financial crisis at $44 billion, of which only $4.5 billion comes from IPOs, based on Refinitiv data.
Volkswagen has said the market’s volatility was precisely why fund managers with money to invest were sorely in need of a stable and attractive stock like Porsche AG.
“Porsche was and is the pearl in the Volkswagen Group,” Chris-Oliver Schickentanz, chief investment officer at fund manager Capitell, said.
“The IPO has now made it very, very transparent what value the market brings to Porsche. That, of course, also has a positive effect on Volkswagen shareholders.”
Faced with tens of billions of costs for a radical shift towards electric mobility and software, Volkswagen executives had long mulled listing Porsche, a move executives hoped would both raise much-needed funds and lift Volkswagen’s own value.
The Porsche and Piech families, in turn, will solidify their control over the carmaker with 25%, plus one ordinary share – carrying voting rights – in Porsche AG, effectively giving them a blocking minority in the namesake brand.
Up to 113,875,000 preferred shares, carrying no voting rights, will be sold to investors over the course of the initial public offering.
Graphic: Porsche vs rivals-https://fingfx.thomsonreuters.com/gfx/mkt/lbvgnqgdrpq/Porsche.PNG
($1 = 1.0352 euros)