porker to own audi?)
Dave Eaton
Dave.Eaton at clear.net.nz
Wed Nov 29 12:53:05 EST 2006
further on this story through this morning.....
dave
'03 rs6
'04 allroad tdi
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FRANKFURT -- Porsche AG, the largest shareholder in Volkswagen, denied
market talk today that it plans to team up with a financial investor to make
a full takeover bid for VW.
Volkswagen shares rallied despite the denial and were up 6.4 percent at
$114.68 (87.27 euros). Volume was more than double the 30-day average.
"Clear denial, there's nothing to it," a Porsche spokesman said when asked
about such a move. Porsche is not buying more shares in the market at this
time, he added.
VW's price surge makes it the most richly valued stock in the European car
sector index, trading at more than 15 times estimated 2007 earnings per
share, according to Reuters Estimates.
Porsche stock rose 3.3 percent to $1,160 (883.00 euros).
Porsche announced on Nov. 15 that it had increased its stake in VW to 27.4
percent and intended to take it to 29.9 percent, just below the 30 percent
level that would force it to make a full takeover offer under German law.
It has in the past ruled out making a full bid for VW.
On Tuesday, Nov. 28, Porsche denied a newspaper report that it was playing
with the idea of carving out for itself premium brand Audi and luxury car
brands from the Volkswagen group.
SCENARIOS
"In our view, Porsche is looking for full control in Volkswagen and/or
Audi," Dresdner Kleinwort wrote in a research note, upgrading VW to "hold"
from "reduce."
"From an industrial logic and financial point of view, both scenarios make
sense. VW's existing net cash position, its future free cash flows and
various additional cash transactions make both deals look financially
achievable," the note said.
Porsche, owned by the family of VW Chairman Ferdinand Piech, sparked
speculation of a full VW takeover by proposing this month to create
authorized capital equal to half its share capital -- and worth around
$10.51 billion (8 billion euros) -- at a shareholders meeting in January.
German bank HVB suggested Porsche could use this money to buy the family's
Porsche Holding in Austria, which owns a group of Volkswagen dealers. In
return, Piech could get Porsche's VW stake, the Munich-based bank added.
Under a deal worked out by Porsche CEO Wendelin Wiedeking and Christian
Wullf, the premier of number-two VW shareholder Lower Saxony state, Piech
would not remain VW chairman after his term expires next year.
But Porsche's rising stake and influence raises the possibility that Piech
may not give up the chairmanship.
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