BERLIN — Volkswagen Group is in advanced discussions with Porsche Automobil Holding SE, the group’s largest shareholder, about a potential IPO of the sports car brand and the two have negotiated a framework agreement as the basis for preparing such a step, VW said in a statement.
The conclusion of an agreement must be approved by the management board and supervisory board, VW said, adding a final decision had not yet been taken.
“Whether a Framework Agreement is concluded … is currently open and depends on the approval of both parties’ boards,” the automaker said.
Porsche SE confirmed in a separate statement it was in discussion with VW about an IPO, a transaction which could include the acquisition of ordinary shares — which bestow voting rights upon the holder — of Porsche AG.
VW shares gained as much as 10 percent to 192.48 euros after losing 3.9 percent in early trading.
Speculation about a Porsche listing, which could be a record-breaking IPO, has lifted hopes on the stock market several times over the past year, but no decision has been made due to a complex stakeholder set-up.
Sources told Reuters last year the Porsche and Piech families, who control Porsche SE, were weighing taking a direct stake in Porsche AG.
The listed Porsche SE is separate from the sports car business. It was created more than a decade ago when Porsche tried to take over control of a much-larger VW Group.
The ill-fated attempt imploded when funding dried up during the financial crisis and the sports car business was folded into VW Group and Porsche SE remained a separate legal entity.
Bloomberg Intelligence estimates Porsche could be valued at between 60 billion and 85 billion euros ($68 billion and $96 billion). That compares with a current market value of around 112 billion euros for the entire group.
Apart from the main VW car brand and Porsche, the German manufacturer also owns nameplates like Audi, Lamborghini and Bentley.
A separate Porsche listing could offer a new funding option for the group. VW largely relies on generating enough cash on its own or issue bonds, because its convoluted shareholder structure limits options to raise fresh equity capital like Tesla has done, without diluting shareholdings of key stakeholders that control about 90 percent of VW’s voting stock.
VW CEO Herbert Diess appeared to dismiss a Porsche listing about a year ago after Bloomberg News and German media reported deliberations about an IPO. But Porsche officials have openly discussed the idea that would give one of the world’s most coveted car brands more independence.
“I think Porsche could be an interesting part for thinking about an IPO,” Porsche CEO Oliver Blume said during a briefing with U.S. reporters last year, cautioning that a final decision will not be his to make. “We have to hand it to Volkswagen and they have not decided.”
Porsche Chief Financial Officer Lutz Meschke first raised the benefits of a potential IPO in 2018, saying such a move could unlock value and replicate Ferrari‘s successful share sale years earlier. The deliberations did not gain support from VW at the time.
Reuters and Bloomberg contributed to this report