High Stakes Porsche Poker

Wendelin Wiedeking has his deal with the Sheik of Qatar. The Sheik of Qatar wants to put down €7B for 20 percent of the Porsche Holding, and for their option package that buys the Sheik 20 percent of Volkswagen. “The deal has been finalized,” Automobilwoche [sub] heard from usually indiscreet German bankers.

The Sheik’s money would nearly wipe out Porsche’s debt load, leaving only €2B to pay off. It would also mean the end of more profits than sales through derivatives, and the end of Wiedeking’s dream to get more than the 51 percent of Volkswagen Porsche currently owns. Under the deal, the Sheik would own 20 percent of Volkswagen directly, and he would own indirectly 20 percent of the 51 percent Porsche owns. Still with us?

The deal may be finalized. But it isn’t closed yet. There still is the extraordinary supervisory board meeting, scheduled at Porsche for July 23.

At that meeting, board members will decide whether to approve the Sheik’s deal, or whether 49 percent of Porsche will be sold to Volkswagen. Anybody who follows the trials and tribulations of PJ O’Rourke’s favorite car maker has noticed that the Sheik raised his initial offer of €5B to €7B.

“Kein Problem” was the answer from Wolfsburg. According to Der Spiegel, Volkswagen now offers “substantially more than €4B” for 49.9 percent of Porsche. The magazine Focus consulted their CPA and he calculated that after taxes, the Volkswagen deal would bring a billion more into Porsche’s kitty than than the Sheik’s new offer. Also, it might sit better with Ferdinand Piech, who also sits on the Porsche board. Lower Saxony would also be pleased. Everybody except Wiedeking seems to like the Volkswagen offer. The Sheik could get a piece of the pie also. Lets not forget, he would need extra money to exercise those Volkswagen options.

“Whether Wiedeking’s future will be discussed at the meeting is unknown,” write the masters of insinuation at Der Spiegel. “There are rumors after rumors that Wiedeking will go shortly after Porsche’s matters have been settled.”