Volkswagen AG has announced its intention to float luxury sports car brand Porsche, in what could become one of the world's largest listings this year.
The German carmaker said it will publish a so-called intention to float for an initial public offering (IPO) in late September or early October to be completed by the end of this year, but added that the listing and timing was "subject to further capital market developments".
Reuters reported that sources close to the float negotiations told it that Volkswagen may extend the four-week period for buyers to express interest, or pull its plans altogether, should investors not show enough enthusiasm to make the IPO worthwhile.
Investors expect a valuation for Porsche of between €60 billion and €85 billion ($60 billion to $85 billion), below some top-end expectations early this year. At the high end of estimates, the IPO could be among the largest in German history and the biggest in Europe since 1999, Refinitiv data showed, Reuters said.
Preferred shares will also be offered to retail investors in countries in Europe including France, Spain and Italy, in an attempt to tap into Porsche's loyal fan base.
Volkswagen also approved a 25% plus one share of ordinary shares in Porsche AG to be sold to Porsche SE, giving the controlling Porsche and Piech families a blocking minority and bolstering their push for a tighter leash on the carmaker.
Porsche saw its operating profit jump by 22% in the first half of this year, in contrast to an 8% fall at the mass market-oriented Volkswagen brand.
If the initial public offering is successful, Volkswagen said it will convene an extraordinary general meeting in December to propose a special dividend of 49% of the proceeds to shareholders to be distributed in early 2023.