Porsche Said to Gain High Acceptance Rate in Rights Offering

Porsche SE, the sports-car maker that plans to merge with Volkswagen AG (VOW), has had a very high acceptance rate for its 5 billion-euro ($7.3 billion) rights offering, a person familiar with the matter said.

Stuttgart, Germany-based Porsche is still tabulating the final results of the sale to existing shareholders that ended at midnight, the person said, declining to be identified because the information isn’t public yet. The company hasn’t extended the offer period, the person said.

Porsche sold shares at 38 euros apiece during a two-week period that started March 30. One existing share carries the right to subscribe to 0.75 new shares. Porsche preferred shares gained as much as 1.80 euros, or 4.2 percent, to 45.14 euros and were trading at 45.04 euros as of 2:34 p.m. in Frankfurt.

Porsche will use the proceeds to cut debt to 1.5 billion euros, a prerequisite for the merger with VW. The sports-car maker and Volkswagen agreed to combine in 2009 after Porsche racked up more than 10 billion euros of debt in an unsuccessful attempt to gain control of VW. The company’s debt rose to 6.34 billion euros by Dec. 31 from 6.05 billion euros on July 31 because of tax repayments.

“This is a step forward for Porsche to lay the conditions for a merger with VW,” said Marc-Rene Tonn, a Hamburg-based analyst with M.M. Warburg who recommends selling Porsche stock. The money will help pay back a 2.5 billion-euro bank loan expiring at the end of June, he said.

Even Split

A statement on the completion of the stock sale will be published tomorrow, a Porsche spokesman said today by phone.

The sale is split evenly between preferred and common stock at about 2.5 billion euros each. The common shares are controlled by the Porsche and Piech families which may spend 2.25 billion euros on the sale, while Qatar Holding LLC, part of the country’s sovereign wealth fund which controls 10 percent of Porsche’s voting stock, may contribute 250 million euros.

Porsche has said all new preferred shares will be underwritten by a banking syndicate led by Deutsche Bank AG, JPMorgan Chase & Co. and Morgan Stanley. Deutsche Bank carried out the sale of common shares while Rothschild served as Porsche’s financial advisor.

Europe’s largest carmaker’s merger with Porsche, originally scheduled for completion in the second half, will probably be delayed into next year because of German legal obstacles. An investigation into share-price manipulation allegations will likely push the deal’s completion into 2012, Porsche said Feb. 24. Volkswagen now owns 49.9 percent of Porsche’s carmaking operations.

Short sellers of VW stock have sued Porsche in the U.S., claiming the carmaker secretly piled up Volkswagen shares and later caused the investors to lose more than $1 billion. At the same time, institutional investors in Germany are seeking 2.5 billion euros in damages over the matter. Porsche has repeatedly denied all the allegations.

To contact the reporter on this story: Andreas Cremer in Berlin at acremer@bloomberg.net

To contact the editor responsible for this story: Chad Thomas at cthomas16@bloomberg.net

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