Porsche lines up IPO demand at up to €85bn valuation

Volkswagen AG’s luxury brand plans to announce its intention to float in Frankfurt in the first week of September, sources say

Porsche has secured pre-orders that exceed the shares on offer at a valuation between €60bn and €85bn. Picture Liesa Johannssen-Koppitz/Bloomberg

Porsche has lined up investor interest for its initial public offering at a valuation of as much as €85bn, signalling one of Europe’s biggest-ever listings is poised to go ahead despite market headwinds, according to sources familiar with the matter.

Volkswagen AG’s luxury brand has secured pre-orders that exceed the shares on offer at a valuation between €60bn and €85bn, said the sources, who asked not to be identified because discussions are private. 

Porsche plans to announce its intention to float in Frankfurt in the first week of September after supervisory board sign-off, barring unexpected market shocks, they said.

Big-name investors including T Rowe Price Group and Qatar Investment Authority have already indicated interest in subscribing to the IPO in that valuation range, the sources said. 

Porsche has also been gauging interest from billionaires, including the founder of energy drink maker Red Bull, Dietrich Mateschitz, as well as LVMH chairman Bernard Arnault, according to the sources.

Spokespeople for VW and Porsche declined to comment, while representatives for the potential investors did not immediately respond to requests for comment.

The high demand in the so-called shadow order book — which is built up ahead of the formal bids collected during the IPO roadshow — is a good sign for the listing that market observers hope will re-open Europe’s nascent IPO market.

Many European and US institutional asset managers that typically invest in major German IPOs have so far shied away from making firm commitments due to corporate governance concerns, the sources said. 

Still, Porsche has enough demand to nearly fill the shadow order book at the top end of the range and is oversubscribed at the lower end, the sources said.

IPO investors will be sold preferred shares in Porsche that do not carry voting rights. The powerful billionaire Porsche and Piech clan, which controls VW through voting stock, would receive a special dividend to fund buying a blocking minority stake in Porsche.

Capital market jitters amid Russia’s war against the Ukraine, soaring energy prices and galloping inflation have cast doubts over Europe’s IPO market in general, which has been anaemic in the year to date.

Some fund managers have, in private conversations with Porsche’s management, voiced concerns about the surprise appointment of the unit’s chief executive, Oliver Blume, to the helm of VW, which will continue to hold the bulk of its shares.

• Bloomberg