Porsche takes majority VW stake

Shares in takeover target jump as luxury carmaker buys further 8% of equity

The German sports carmaker Porsche upped its stake last night in Volkswagen, Europe's biggest auto manufacturer, to a majority holding.

It now holds 50.8%, up from 42.6%, and wants to raise that to 75% later this year. It will also be forced to make a mandatory takeover offer for the Swedish truckmaker Scania, in which VW holds 68.6%.

But Porsche made it plain that it had no intention of adding the manufacture of lorries and buses to its fleet of high-­performance luxury cars. It will bid only the legal minimum under Swedish law.

Late last year Porsche caused panic on European bourses by disclosing that it had acquired options giving it just under 75% of direct and indirect control of VW. With its shares trading at more than €1,000, VW briefly became the world's most valuable private-sector company.

Last night's move triggered a further surge in VW shares today, driving the stock up more than 6% to €271.50 this morning.

Porsche used its supply of fixed-price options to buy the extra 8.2% of VW's equity, which would normally be worth €6bn at market prices. It is thought it may have paid about €100 a share.

But analysts doubt whether, in the current market turmoil and economic recession, Porsche will raise its stake this year to the 75% which, under German corporate law, would give it full control.

Its room for manoeuvre is squeezed by the controversial 20% blocking minority stake still held by the federal state of Lower Saxony, despite a ruling by Europe's highest court that this is illegal.

The European commission plans to take Germany to the European court of justice over its refusal to amend the 1960 "VW law" in line with the ECJ ruling.

But, with German carmakers clamouring for government assistance as sales collapse, the political mood is hardening in favour of the VW law. "The call for state involvement has become popular ever since the nationalisation of the banks so the wind has turned against Porsche," one analyst said.


David Gow in Brussels

The GuardianTramp

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