Volkswagen plans Porsche stock offering, $73B sports car producer

Volkswagen Group set Porsche's final listing price at 82.50 euros per share, valuing the firm at $73 billion.

Prove that the legendary sports-car brand can escape the recession in capital markets and pull off Europe's largest IPO in a decade.

VW's supervisory board and executive committee approved the final list price late Wednesday. 76.50-82.50-euro range first provided to investors. Porsche begins trading Thursday in Frankfurt.

The 911 maker's IPO is a daring step into public markets that have been closed to IPOs for most of the year due to the European energy crisis, rising interest rates, and record inflation. 

“If you can carry off an IPO in a tough market, it underlines the business's attractiveness,” said Jefferies analyst Philippe Houchois. Porsche is a mature, well-known company that doesn't need funding. 

Companies raised less than $10 billion in IPOs this year through August, an 83% decline from last year. Porsche's listing is expected to be the largest in Europe since miner Glencore Plc's 2011 London IPO.

Porsche's share price is close to VW's overall market worth, which includes Audi, Skoda, Seat, and VW. The listing's convoluted structure has drawn criticism despite its strong promotion.

Volkswagen separated Porsche's share capital into voting and non-voting shares, keeping 75%. Only non-voting shares (12.5 percent) are publicly listed, with a major percentage going to four cornerstone investors. 

The remaining 12.5% of shares go to VW's largest shareholders, the Porsche and Piech families, via Porsche Automobil Holding SE. 

The family already holds 53% of VW's voting shares, and under the IPO terms, they will also obtain 25% plus 1 share of Porsche AG's voting stock for 10.1 billion euros (a tiny premium to preferred shares).

Porsche SE will finance the acquisition with 7.9 billion euros in debt, buying shares in two tranches starting next month and again in January after VW's special dividend.

Porsche aims for 38 billion euros in revenue and 18% return on sales this year, up two points from last year. Long-term returns will exceed 20%. 

Porsche is best recognized for its 911 model, but it has added popular crossovers like the Macan, Panamera, and Taycan in the previous decade.

Some investors are also concerned about the company's governance. Oliver Blume, CEO of Porsche, is now CEO of Volkswagen.

Bernstein estimates Porsche's market valuation at 80 billion euros, behind luxury companies but above carmakers.