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Porsche IPO likely to be priced at top end of range, terms show

Sept. 26, 2022 Updated Mon., Sept. 26, 2022 at 6:31 p.m.

A Porsche 718 Spyder luxury automobile, right, sits in the Porsche SE showroom in Dortmund, Germany, on  Sept. 7.   (Alex Kraus/Bloomberg)
A Porsche 718 Spyder luxury automobile, right, sits in the Porsche SE showroom in Dortmund, Germany, on  Sept. 7.  (Alex Kraus/Bloomberg)
By Swetha Gopinath Bloomberg

Volkswagen is likely to price the 9.4 billion-euro, or $9.1 billion, initial public offering of sports-car maker Porsche at the top end of an initial range, demonstrating the depth of demand for its share sale.

Investor orders below 82.50 euros apiece risk missing out on the transaction, according to terms seen by Bloomberg. Indicated demand for the offering exceeds deal size, the terms showed, even as markets sour and recession fears mount.

Porsche shares were being marketed to investors at 76.50 euros to 82.50 euros apiece, valuing the carmaker at as much as 75 billion euros. The company is expected to set the final IPO offer price after the order book closes Wednesday, and the new stock is set to start trading a day later.

Volkswagen garnered more than enough investor orders to cover the IPO just hours after it started taking requests for the share sale, according to terms seen by Bloomberg last week. Four cornerstone investors – Qatar Investment Authority, Norway’s sovereign wealth fund, T. Rowe Price and ADQ – have together committed to take up as much as 3.7 billion euros of the IPO.

The offering has attracted orders worth more than 1 billion euros from retail investors, mainly based in Germany, according to people familiar with the matter.

Porsche’s listing is injecting fresh life into an IPO market that’s been shut for most of the year with investors spooked by rising inflation, interest rates and the threat of a global recession. Market headwinds gathered pace on Monday, with a selloff in UK assets weighing on investment sentiment.

VW is also selling a stake of 25% plus one common share to Porsche Automobil Holding, the investment company owned by the Porsche-Piech family. The purchase of voting shares means the billionaire clan, who also hold 53% of VW’s voting shares, will have a minority blocking stake in their former family business.

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