Porsche has denied reports that Porsche may increase its stake in Volkswagen to 75%.
Focus magazine reported that Porsche chief Wendelin Wiedeking is looking to increase his power at the company and, with 75%, would have control of a so-called domination and profit transfer agreement that would allow Porsche to make all major decisions including which new models would be built and where they would be produced.
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Traditionally, the German State of Lower Saxony has been able to block any decisions that would adversely affect employees at Volkswagen through its 20% shareholding. With a domination agreement in place it would no longer be able to do this.
Reuters reports that raising its stake by another 25% could cost Porsche a further EUR23bn, which it says Porsche would be able to finance relatively easily.Reuters said that a domination agreement would need to be approved at the company’s AGM and it is unlikely that Porsche would be in a position to do this at the next meeting in late April. The news agency also speculated that it might also be too late for the 2009 AGM. German lawmakers are currently pushing though legislation to allow Lower Saxony to retain its blocking minority.
In response to the speculation Porsche Automobil Holding SE said that the idea, “does not consider the realities of VW’s shareholder structure.”
“In view of the fact that the German Federal State of Lower Saxony, as the second major shareholder, holds a stake of more than 20 percent in Volkswagen, the probability of acquiring the necessary shares from the remaining freefloat is very small indeed,” said the company in a press statement. It added: “The background of the current media reports is obviously provided by rumours on the Stock Exchange which can be traced back to the speculative mind games of analysts and investors.”
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