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Porsche rejects VW offer as Qatar seeks deal

The battle over the future of Porsche Automobil Holding SE escalated on Monday when the German sportscar maker announced it received a written offer from state-owned Qatar Investment Authority over a possible stake sale, just hours after it rejected an offer from Volkswagen AG.

"We received an offer from Qatar to acquire a stake and take over (Porsche's) options on Volkswagen stock," Porsche spokesman Albrecht Bamler said.

The offer will form the basis for upcoming talks with Qatar on the purchase price, he said, adding that the Porsche and Piech families - which control 100 percent of Porsche's voting stock - still have to examine the Qatari proposal.

Earlier Monday, Porsche said it wouldn't consider the sale of a 49.9 percent stake to Volkswagen because it would then immediately have to re-negotiate a 10.75 billion euros credit facility.

Bamler said Volkswagen had offered directly to supervisory board Chairman Wolfgang Porsche to buy the Porsche stake, but hadn't made the offer to the company's executive board, which would have to consider such a deal.

Volkswagen declined to comment.

The battle over Porsche and its holding in Volkswagen, Europe's biggest car maker by sales, is becoming increasingly acrimonious.

Porsche has tried to acquire Volkswagen, building up a stake of 51 percent plus a complex set of options that would enable it to hike its stake by around 20 percent if exercised.

But the credit crunch and the stock market collapse meant Porsche ran into financing trouble, and it is now in talks about a capital injection from the state-owned Qatar Investment Authority.

The company's net debt tripled to 9 billion euros when it built its VW shareholding, forcing it to abandon its plan to push for a 75 percent stake and gain access to Volkswagen's cash reserves.

It might now give up a stake in itself in return for an investment from QIA, or give QIA some of its VW options, or a combination of both. Porsche spokesman Bamler declined to elaborate on details of the offer from Qatar.

Volkswagen's powerful supervisory board chairman and former Chief Executive Ferdinand Piech, who also sits on Porsche's supervisory board, favors an outright sale of Porsche's core sportscar operations to Volkswagen to raise funds for Porsche.

Porsche would then be integrated as a tenth brand into Volkswagen along with nameplates such as Audi, Skoda or Seat.

But Volkswagen spokesman Michael Brendel Monday reiterated that VW hadn't issued an ultimatum to Porsche requiring it to agree to a merger of the two companies by the end of this month, after Porsche on Saturday had said it rejected such an ultimatum.

"It appears that ... the relations ... between VW and Porsche have hit an all-time low," said IHS Global Insight analyst Tim Urquhart. "What was already a difficult negotiation is rapidly descending into farce," he added.

Porsche said last month that its owner families unanimously support the plan to get an outside investor on board to safeguard the company's independence.

The maker of models like the Cayenne and 911 said on Friday that talks with QIA were nearing completion after the Qatari's completed due-dilligence and the result of that process was positive.

The histories of Porsche and Volkswagen have been entwined ever since Ferdinand Porsche designed Volkswagen's iconic Beetle in the 1930s.

Volkswagen's supervisory board chairman Piech is the grandson of Ferdinand Porsche. Porsche's supervisory board chairman Wolfgang Porsche is Piech's cousin.

But the family ties have been tested frequently as Piech has made several controversial moves to maintain hisinfluence and forge a European auto empire offering vehicles ranging from the ultra-luxury Bugatti Veyron sportscar to Scania's heavy trucks..


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Zawya Dow Jones
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