Volkswagen Announces Intention to Sell 25% Equity Stake in Porsche; Reducing FVE to EUR 326

No-moat-rated Volkswagen AG says it intends to sell 25% of its ownership in Porsche AG. As a result, the firm split the capital of Porsche AG into 50% ordinary and 50% preferred shares. Porsche Automobil Holding SE, the investment firm of founding families Porsche and Piech, is expected to purchase 25% of the ordinary. Porsche AG will also have an initial public offering of 25% of the preferred shares. Volkswagen says that it will hold a December shareholder meeting to vote on a special dividend of 49% of the gross proceeds. Assuming an enterprise value-to-EBITDA multiple between 8 times and 10 times, we estimate Porsche’s valuation between EUR 80 billion to EUR 100 billion. We estimate the total equity value of the Porsche AG stake being sold to be between EUR 14 billion and EUR 19 billion.