Porsche turned down yesterday an offer from its bigger rival Volkswagen (VW) to help the cash-strapped sports carmaker out of its financial difficulties.
“It is not a practicable way for us to sell 49.9 percent of Porsche AG to VW,” a spokesman for Porsche told German media.
Porsche said it could not accept the VW offer because it would mean Porsche would then have to repay immediately a 10.75 billion euro (US$15 billion) credit it had previously agreed with a bank consortium, the spokesman said.
Volkswagen had publicly denied on Sunday it had set Porsche an ultimatum for agreeing on the merger deal, after Porsche bosses had accused their rival of “extortion.”
Tensions surfaced after a weekend report on the website of Der Spiegel magazine claimed that Volkswagen had set Porsche a deadline of today to agree to a merger plan, or otherwise pay back a 700 million euro loan.
Porsche chairman Wolfgang Porsche and his deputy on the Stuttgart-based company’s supervisory board, Uwe Huck, then released a statement in which they vowed not to “accept extortion.”
“Ultimatums do not belong in the 21st century,” the Porsche bosses said. “We hope very much in the interest of the common goals that its authors regain their calm and will pursue their proposals in internal talks and not via headlines.”
But Volkswagen denied yesterday that it had made such a demand.
“There is no ultimatum,” a spokesman for the Wolfsburg-based company said.
Der Spiegel said the plan put to Porsche would see Volkswagen take a 49.9 percent stake in the luxury carmaker before the Qatar Investment Authority acquired Porsche’s Volkswagen shares.
The combined entity formed as a result of these steps would be 40 percent owned by the Porsche and Piech families, with the Qataris taking 15 percent and another sovereign wealth fund picking up 5 percent.
Some 20 percent would be held by the state of Lower Saxony, a key investor in Volkswagen.
Porsche could yet seek to avoid the embrace of Volkswagen by going it alone with the Qataris.
The row is the latest twist in a saga that has seen Porsche, once Volkswagen’s predator and now its majority shareholder with a 51 percent stake, lose its advantage.
Porsche made its first move on Volkswagen in 2005, when it bought a 20 percent stake.
It continued to snap up options on more shares, until the size of its holding became clear and many hedge funds that had been short-selling Volkswagen — lending out shares before buying them back — scrambled to close their positions.
This stampede of panic-buying sent Volkswagen’s shares sky-high and gave Porsche a 6.8 billion euro windfall from the sale of options.
However, the cost of acquiring the extra shares in Volkswagen contributed to Porsche’s 9 billion euro debt pile.
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