VW Stock Dips As Porsche Increases Stake In Wolfsburg
Porsche is upping its stake in Volkswagen once again. The automaker is exercising an option to purchase 3.6 percent of the German automaker, which will push it to 30.9 percent overall. This is a significant bump, because raising any stake past 30 percent means that Porsche will have to tender a takeover offer to VW, as per German legal requirements.
The move by Porsche had been expected, with the rumored bump pushing VW’s stock through the roof—over the course of 2007, it’s been up by more than 30 percent. Porsche augmenting its power apparently hasn’t deterred the German state of Lower Saxony, which plans on remaining invested in VW as its second-largest shareholder. Despite all this, VW’s shares took a dive on word of Porsche’s added investment, mostly because Stuttgart will only be forced to pay the legal minimum per share, which is presently well under what the company’s stock is trading for (
The move is said to be a proactive move to protect VW from possible takeover bids by hedge fund investment groups, but it should also help cement cost-savings and development synergies between the two companies.
+ Reuters: Porsche boosts VW stake to 30.9 pct via option (via Globe & Mail)
Comments
Iain
Oh, the irony. Remember when Porsche was down in the dumps a few decades ago and the big discussion was who would buy Porsche? VW, M-B, BMW? Now, with some solid product hits under its belt, Porsche is in the buying seat and close to taking over VW. The power of product or the power of the Piech?
mo
I believe the problem with VW is going far away from being people's car. building more luxurious cars with higher price tags first made the car overlap with Audi (which all prefer than VW). then, it made ppl look for other alternatives, let's say Opel for example. this is especially that many has this image about VW "it is not that fancy car like BMW, MB or Audi. if VW wanna go up again, they should get back to the roots and become once again "people's car", a reliable, cheap car.
Andy
VW's problem is the Japanese. It was able to stem the Asian tide in the 1970s and '80s with compact, low-priced, and fairly dependable motorcars. VW has lost those three traits. It ventured into building a big sport-ute with the Touareg, a large luxury sedan with the Phaeton, raised the prices of its main line of cars, erstwhile losing its reputation for reliability. Why bother with a Golf or Jetta when you can buy a Civic? The Civic is cheap, reliable, fuel-efficient, and has trim lines to support the frugal or sporty buyer. And why would anyone consider a Touareg or Phaeton? VW has lost its identity.
bmwloco
Been in a Rabbit or Jetta or, pray tell, a new Beetle of late?
They are "People Cars". Solid, simple, and very fun to drive. Change the oil and mind the belts, you'll travel happily for nearly a decade of normal use, or over 200k if you wish.
A new Rabbit flat whips a Civic in almost every category. Standard features, safety, etc. If you don't believe it, park 'em side by side and see.
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