Porsche Sued by Investment Funds Seeking $2.6 Billion Over VW Takeover Bid
Porsche Automobil Holding SE (PAH3) was sued by a group of investment funds seeking about 2 billion euros ($2.6 billion) in damages allegedly suffered from the carmaker’s failed takeover attempt of Volkswagen AG (VOW) in 2008.
The group, whose members weren’t identified, filed the lawsuit in the district court of Stuttgart, Germany, according to a statement released on the OTS newswire late yesterday. The plaintiffs also filed an arbitration application regarding Volkswagen (VOW), two members of the VW supervisory board and one member of the management board of VW, according to the statement.
“The accusations are not justified and we reject them,” Frank Gaube, a spokesman for Stuttgart-based Porsche, said by telephone today. The company needs to receive the suit before it can closely examine it, he said.
Porsche and VW 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 merger has been held up by lawsuits linked to Porsche’s failed effort to buy VW, with the Wolfsburg, Germany-based carmaker waiting to avoid being held responsible for any financial ramifications from the suits.
The investor group’s complaint alleges that “Porsche gained control over the price of VW common stock as it secretly built enormous derivative positions covering almost all of VW’s freely traded shares, then triggered a massive short squeeze, and finally released billions of euros worth of shares into the short squeeze for its own profit,” according to the statement.
VW spokesman Michael Brendel didn’t immediately respond to a voicemail message left on his mobile phone today.
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