The Porsche-Piech family bought Qatar Holding LLC’s 10 percent stake in Porsche Automobil Holding SE to regain full control of the investment company whose only asset is a majority stake in Volkswagen AG.
The purchase gives the family 100 percent of the common shares and voting rights in the holding company, the Stuttgart, Germany-based carmaker said in a statement today. The family’s stake is worth about 9.37 billion euros ($12.5 billion), assuming the common shares are valued at the same price as the publicly traded preferred shares, according to Bloomberg data.
“It’s clear that the family has an interest in holding 100 percent of the voting rights,” said Frank Biller, an analyst with Landesbank Baden-Wuerttemberg in Stuttgart. “That has been the case in the past and looks to be the case now. Qatar, as a financial investor, likely got a higher price than they paid.”
The holding company controls VW, valued at 73.9 billion euros, through its ownership of 50.7 percent of the voting rights in Europe’s largest carmaker. The family in 2009 sold Qatar the stake, as well as VW options, after Porsche racked up 10 billion euros in debt during a failed effort to buy VW. Qatar said today it will keep its current 17 percent VW holding.
“All of Porsche SE’s common stock is now again held by the Porsche and Piech families,” Wolfgang Porsche, supervisory board chairman, said in today’s statement. “This is an expression of our confidence in the prosperous future of Porsche SE as the largest shareholder of Volkswagen.”
Qatar’s stake is worth about 930 million euros, assuming the common shares are valued at the same price as the preferred stock, Biller said. The family and Qatar aren’t disclosing the price, Albrecht Bamler, a Porsche spokesman said.
Porsche’s preferred stock gained 60 cents, or 1 percent, to 61.17 euros at the close of trading in Frankfurt today. The shares have dropped 0.9 percent this year, valuing the company at 18.7 billion euros.
The holding company’s only asset is the VW stake after selling the remainder of the automotive business to VW last year for 4.5 billion euros. The two companies have called off plans for a full merger because of lawsuits against Porsche linked to its aborted takeover of VW more than four years ago.
Qatar, which became the richest country in the world per capita through exporting liquefied natural gas, used surpluses that averaged 8 percent a year of gross domestic product between 2008 and 2012 to invest about $60 billion a year abroad, according to the International Monetary Fund.
While still awash with cash, its growth is slowing as gas exports level off and oil yields decline in an economy that’s half based on petroleum, a government report in December said. Citigroup Inc. estimated in a report in March that the budget surplus in the country will turn to a deficit by 2015, while the IMF predicts a current account shortfall in 2017.
Qatar Holding, the foreign-investment arm of the sovereign-wealth fund, purchased stakes in Barclays Plc, the second-largest bank by assets in the U.K., Credit Suisse Group AG, which has the same position in Switzerland, and Tiffany & Co., the world’s No. 2 luxury jewelry retailer. Qatar said it remains fully committed to Volkswagen.
“As a long-term strategic investor, we believe that Volkswagen represents a unique investment,” Ahmad Al-Sayed, Qatar Holdings chief executive officer, said in today’s statement. “We look forward to continue making a significant contribution to the future success of the combined group.”
Porsche is facing legal suits in Germany from investors seeking a combined 5.4 billion euros who say the company failed to inform shareholders about its takeover plan. Porsche has repeatedly denied the claims.
Martin Winterkorn, CEO of both VW and Porsche, said in April that the holding company continues to look into strategic investments in mid-size companies to expand its assets beyond control of VW. The focus is on companies related to the automotive sector with experienced management, he said.