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VW Shares Sold for $1.19 Billion by Waddell & Reed

VW Shares Valued at $1.21 Billion Put on Sale by Deutsche Bank
A man adjusts the protective cover on a Volkswagen Beetle automobile as it sits on the company's stand ahead of the opening day of the 83rd Geneva International Motor Show in Geneva on March 4, 2013. Photographer: Valentin Flauraud/Bloomberg

Volkswagen AG preferred shares were sold for 914 million euros ($1.19 billion) by Waddell & Reed Financial Inc., after the stock touched a four-month low yesterday on the automaker’s 2013 outlook.

The 5.78 million shares were sold for 158 euros per share, a 4 percent discount to yesterday’s close, Deutsche Bank AG said in a statement today. Waddell & Reed owned 6.37 million shares before the sale, according to data compiled by Bloomberg.

VW Chief Executive Officer Martin Winterkorn said the automaker, Europe’s biggest, is confronting “tougher competition and difficult economic conditions.” The Wolfsburg, Germany-based carmaker forecast steady earnings this year.

“The stock’s momentum has deflated a bit,” said Juergen Pieper, an analyst with Bankhaus Metzler in Frankfurt. “The market’s a bit disappointed by the outlook, but VW has become careful about its statements because it’s been so obviously successful over the past few years.”

VW’s widely traded preferred stock dropped as much as 5.55 euros, or 3.4 percent, to 159.10 euros and traded down 2.9 percent at 159.85 euros as of 1:25 p.m. in Frankfurt. The shares have fallen 7.2 percent this year, valuing the company at 72.2 billion euros.

The stock was offered to institutional investors in an accelerated bookbuilding with Deutsche Bank as the sole bookrunner, the bank said today.

German Headwinds

VW faces headwinds this year as the sovereign-debt crisis spreads from southern Europe to Germany. Vehicle registrations in VW’s German home market dropped 9.6 percent in the first two months of 2013, with VW brand sales tumbling 14 percent, according to data from the country’s motor vehicle office KBA.

Weak demand has led to heavier incentives. Dealer discounts in Germany widened to an average 11.8 percent of the list price in January from 11 percent a year earlier, according to Autohaus PulsSchlag industry magazine.

Industrywide car sales in Europe, already at a 17-year low in 2012, fell in January to the lowest level for that month since records began in 1990, according to the ACEA trade group.

Download: Earnings

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