Volkswagen AG is looking to raise as much as 9.4 billion euros ($9.4 billion) from the initial public offering of its iconic sports-car maker Porsche AG in what could be Europe’s largest listing in more than a decade.
The German carmaker said late Sunday it is seeking a valuation of 70 billion to 75 billion euros ($70 billion to $75 billion) for the listing, below an earlier top-end goal of as much as 85 billion euros, with the deal going ahead at a time of deep market upheaval. European markets have been largely shut to IPOs for most of the year, with companies shying away from seeking new listings because of the region’s energy crisis, rising interest rates and record inflation.
Porsche isn’t alone in scaling back valuation targets, with Intel Corp. lowering expectations for its Mobileye IPO.
Amid the stock market slump, the plan to list is getting a boost from firm commitments of key cornerstone investors. Qatar Investment Authority, Norway’s sovereign wealth fund, T. Rowe Price and ADQ are set to subscribe to preferred shares of as much as 3.7 billion euros, the manufacturer said.
“We are now in the home stretch with the IPO plans for Porsche and welcome the commitment of our cornerstone investors,” VW’s Chief Financial Officer Arno Antlitz said. The offer period will start on Sept. 20 with a planned trading start on Sept. 29.
Volkswagen preferred shares rose as much as 1.4% in Frankfurt trading and were up 0.4% at 10:15 a.m.
During meetings with potential investors, VW pitched the listing as a chance to invest in a company that combines the best of carmaking rivals like Ferrari NV and luxury brands such as Louis Vuitton. While Ferrari and Porsche both target wealthy buyers, the Italian manufacturer remains in a league of its own, boasting industry-leading margins and delivering a fraction of Porsche’s 300,000 annual sales.
At the mid-valuation point for the preference shares, the IPO would value Porsche at 10.2 times earnings before interest, tax, depreciation and amortization, according to Jefferies. This compares to Ferrari’s EBITDA multiple of 23.1 times. Still, Porsche’s upper valuation almost matches VW’s total market value — comprising Audi, Skoda, the VW brand as well as Seat among others — of 88 billion euros.
Porsche is targeting revenue of as much as 39 billion euros this year and return…
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