Porsche has made a whopping $8.7 billion by selling VW options; but may have to give up ownership bid
The market is rife with allegations of Porsche misusing loopholes in German laws.
Now, Porsche is seeking an overturn of a German ruling that gives the state of Lower Saxony special status. Evidently, Porsche is looking for management control; which would enable it to alter Volkswagen's structure & gain full access to its books. But the State of Lower Saxony has voting rights (as a 20% plus shareholder, thanks to the ruling) it doesn't want to give away. Porsche is trying to take the case to EU court, which might be stalled at the court in Hanover. Sal Oppenheim’s Christian Breitsprecher asserts, “The sensible thing (for Porsche) would be to sell a part of their holding and cash-in on this opportunity by settling down for a 60-65% holding in the company.” In fact, VW's options have proved very positive for Porsche, as the latter has made a cool $8.7 billion by selling 5% of VW options on October 29. So if the legal tangle gets too complicated, that seems to be the best track for Porsche – take the VW stake as an investment; and give up claims to acquiring them; unless it finds another loophole in German law!
The market is rife with allegations of Porsche misusing loopholes in German laws.
Now, Porsche is seeking an overturn of a German ruling that gives the state of Lower Saxony special status. Evidently, Porsche is looking for management control; which would enable it to alter Volkswagen's structure & gain full access to its books. But the State of Lower Saxony has voting rights (as a 20% plus shareholder, thanks to the ruling) it doesn't want to give away. Porsche is trying to take the case to EU court, which might be stalled at the court in Hanover. Sal Oppenheim’s Christian Breitsprecher asserts, “The sensible thing (for Porsche) would be to sell a part of their holding and cash-in on this opportunity by settling down for a 60-65% holding in the company.” In fact, VW's options have proved very positive for Porsche, as the latter has made a cool $8.7 billion by selling 5% of VW options on October 29. So if the legal tangle gets too complicated, that seems to be the best track for Porsche – take the VW stake as an investment; and give up claims to acquiring them; unless it finds another loophole in German law!
Source : IIPM Editorial, 2012.
An Initiative of IIPM, Malay Chaudhuri
and Arindam Chaudhuri (Renowned Management Guru and Economist).
and Arindam Chaudhuri (Renowned Management Guru and Economist).
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