Volkswagen (VW) is looking to raise up to $9.4 billion from its forthcoming initial public offer (IPO) of Porsche, a new report from Bloomberg says.

That would make it Europe’s largest listing in more than a decade. The company has announced that, despite havoc in both European capital markets and European auto markets, it is seeking out a valuation of €70 billion to €75 billion for its listing, down from an €85-billion figure that was being tossed around prior.

HOME STRETCH

Other forthcoming IPOs – like Intel’s planned IPO for Mobileye – have also scaled back expectations due to market volatility. However, for Porsche, Qatar Investment Authority, Norway’s sovereign wealth fund, T. Rowe Price and ADQ have all signed on to subscribe to preferred shares totaling as much as €3.7 billion.

VW Chief Financial Officer Arno Antlitz told Bloomberg: “We are now in the home stretch with the IPO plans for Porsche and welcome the commitment of our cornerstone investors.”

VW has been pitching the investment opportunity as a way to combine the best of companies like Ferrari and Louis Vuitton.

The valuation puts Porsche at 10.2x EBITDA, the report states, well below Ferrari’s valuation of 23.1x EBITDA. Porsche’s target for the year is for €39 billion in revenue.

The IPO will also hand over decision-making to the Porsche-Piech family, who lost control of the company more than 10 years ago during a battle with VW. Investors will be allowed to subscribe to 25 per cent of Porsche preferred shares, which have no voting rights.

The Porsche-Piech family will buy 25 per cent + of the company’s common shares with voting rights and has agreed to pay a 7.5 per cent premium on top of the price range. Despite the spin-off, however, some have raised questions about its future independence, since Oliver Blume, Porsche’s chief executive, is being appointed to head VW.