Porsche Fails To Takeover Volkswagon

Written by tonks on June 4, 2007

Porsche LogoLuxury car maker Porsche AG said that its offer to buy the shares it does not already own in Volkswagen AG expired with less than 1 percent of the stock offered for sale by investors. Porsche was obliged under law to make an offer for the remainder of the company after raising its stake beyond 30 percent earlier this year. Porsche has maintained that it has no plans to acquire Europe’s biggest automaker outright.

The company offered euro65.54 (US$89.42) for each preferred share and euro100.92 (US$137.69) per ordinary share. Volkswagen shares rose 1.9 percent to euro115.80 (US$155.82) in Frankfurt, while Porsche shares gained 1 percent to euro1,352.53 (US$1,819.92). “Given that the current stock exchange price is higher than the offer price, the result was as expected,” said Chief Executive Wendelin Wiedeking.

“The completion of the mandatory offer is, amongst others, subject to approval by the relevant antitrust authorities and is not expected to occur prior to the end of June.” Porsche will pay for the tendered shares with existing cash resources. Porsche lifted its stake in Wolfsburg-based Volkswagen in March to help shield the company from foreign takeovers.

The company’s other major shareholder is the German state of Lower Saxony, which holds a 21 percent stake. Under German law, Porsche is now free to acquire further shares in Volkswagen until it reaches 50 percent at which point it would have to make another takeover offer.

Posted Under: Porsche

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