Volkswagen investors divided on whether Porsche IPO

Some 63% of investors polled by Bernstein expressed concern that Diess’s surprise departure would weigh on the stock’s performance, while 22% thought it could improve it.

VW plans to list the Porsche division in the fourth quarter.

Porsche may already have to go public at a steep discount if it decides to pursue listing as economic hurdles mount, Reuters reported last week.

“Mr. Blume will retain his role as CEO, including after a possible IPO,” Volkswagen said on Monday in response to questions from Reuters.

Just days before his appointment was announced, Blume and other Porsche executives speaking at his capital markets day sold a possible listing of the sports car brand as a way to give him more independence and entrepreneurial freedom while raising funds for the group.

“Such a dual mandate can only exist temporarily in an emergency situation – it will not work in the long term,” said Ulrich Hocker of the German Association for the Protection of Securities (DSW), which represents investors in detail.

Most investors do not expect a listing delay at this stage. Some, including auto industry veteran Ferdinand Dudenhoeffer, have speculated that Porsche chief financial officer Lutz Meschke could eventually succeed Blume at the sports car brand.

VW has not presented any succession plan for Blume at Porsche.

Volkswagen’s share price has almost halved since March 2021, underperforming a 17% decline in the STOXX Europe 600 Automobiles & Parts India over the same period.

The company responds to a complex network of investors. Its supervisory board includes labor and regional government representatives, as well as members of a holding company owned by the Porsche and Piech families and made up in part of Volkswagen executives.

Porsche’s Meschke sits on the board of the Porsche-Piech family’s Porsche Automobil Holding, VW’s largest shareholder and owner of more than half of its voting rights, while VW chairman Hans Dieter Poetsch is on the board. the CEO.

Tensions over who is pulling the strings in Wolfsburg spelled the death knell for several Volkswagen executives before Diess, with former CEO Bernd Pischetsrieder and former VW brand chief Wolfgang Bernhard forced out of their jobs at the end of the years 2000 after repeated clashes with the works council. .

While Diess is widely credited for Volkswagen’s pivot to electrification – taking the automaker from reputation ruin of the diesel scandal to European market leader in electric cars – the governance issues caused by his divisive approach to leadership ultimately weighed on the investment case, analysts at Stifel Europe Equity Research said.

“Poor corporate governance scares away many investors,” Janne Werning, who leads ESG Capital Markets & Stewardship at Union Investment, one of Volkswagen’s top 10 shareholders, said at the automaker’s annual meeting l ‘last year. Union Investment, which reiterated its criticism of VW’s governance at the last annual meeting in May, declined to comment for this article.

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