High Stakes
January 6, 2009
In a short statement released Monday, Jan. 5, Stuttgart-based Porsche said that by buying new VW shares, it "will increase its participation to 50.76 percent" of the group's capital, compared with 42 percent before.
Under Swedish law, Porsche now has to make a mandatory offer for outstanding shares in the heavy truckmaker Scania, in which VW is lead shareholder.
Porsche "is not bound by pre-acquisition prices and is only obliged to offer the minimum price prescribed by law," the statement said. Porsche has no "strategic interest" in the company, it added, nor is it interested in acquiring Scania shares.
Scania speculation
Porsche is reported to have said the minimum price for the takeover offer would be calculated on the basis of the volume-weighted average stock exchange price of the Scania shares during the 20 trading days prior to publication of the acquisition of the majority in Volkswagen.
VW controls about 68.6 percent of the votes and around 37.7 percent of the capital in Scania. It is also the biggest single shareholder in Scania's German rival MAN, and is pushing for closer cooperation between the two companies under its own guidance.
According to AP, Scania shares closed down 2.7 percent at 80.25 kronor ($10.42) in Stockholm.
Forced delay
Porsche originally planned to acquire more than 50 percent of VW's stock last year but was forced to delay the operation after the value of shares soared amid frantic stock market speculation.
A massive short squeeze in late October briefly made VW the world's most valuable company, with its share price rocketing to just over 1,000 euros from 210 euros in two trading sessions.
On Monday, VW shares closed at 254.74 euros, close to the range Porsche had set for itself of between 200-250 euros.
Majority control
Porsche's takeover sees a family-controlled company that makes just 100,000 sports cars a year obtain control of a national institution that makes five million vehicles every year.
A Porsche spokesman confirmed that the company planned to increase its stake in VW to 75 percent at some point this year, given a favorable market environment. Having more than 75 percent would allow it to seal a so-called domination contract giving it full financial control.
German law ensures that a minority investor that owns 25 percent of a company's shares can block strategic decisions, but in the case of VW that level is currently set by law at 20 percent, the amount owned by the state of Lower Saxony, where VW is based.
Porsche has challenged the so-called VW law and has received support from the European Commission, which has threatened to haul Berlin into European court again after a revised version of the law retained the 20 percent minority blocking threshold.