Porsche Holdings Seeks 75% of VW. Or Not.
Focus magazine [via The International Herald Tribune] says leaked Porsche internal planning documents reveal that Porsche Holdings is secretly (well, not now) aiming for a 75 percent share in Volkswagen. Analysts point out that a more sizable share would give Porsche access to VW's cash flow through a "domination and profit transfer agreement." (That's a far cry from a " collegial partnership," but hey, who's listening?) To get their hands on VeeDub's cash, Porsche would have to up its $15b deal by an additional $35b. Apparently, Porsche's got the finances to git 'er done. BUT… The German state of Lower Saxony is unlikely to surrender any part of its 20 percent VW stake, which "safeguards" 82k jobs withiin its jurisdiction. Furthermore, much of Porsche's controlling family oppose the deal; they're not in love with either VW's risk or VW chairman Ferdinand Piech. Porsche denied the Focus Magazine story this morning, saying Piech is the anti-Christ. No wait; the deal "overlooks the realities of VW's shareholder structure."
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What's driving this takeover? I see three major likely scenarios: 1) Piech's ego, 2) financial considerations (access to VW cash; also VW shares have climbed about 60% over the past year, so it's been a GREAT investment for Porsche), or 3) a hedge against some regulator somewhere telling Porsche they need to build economy cars because their SUVs and sports cars emit too much CO2. IMO it's anyone's guess why they're doing it (though it could be a combination of all three).