Porsche will increase stake in VW
By ASSOCIATED PRESS
Published March 25, 2007
FRANKFURT, Germany - Prestige automaker Porsche will increase its stake in Volkswagen AG, maker of the Beetle, Golf and Jetta, in a widely expected move aimed at keeping the company firmly in German hands.
A spokesman for Porsche said the company did not plan to acquire Volkswagen, Europe's biggest car maker, which is partly owned by the state of Lower Saxony and is looked to as both an industrial powerhouse and a major provider of jobs.
Stuttgart-based Porsche AG, which makes upscale and expensive sports cars like the 911 and Boxster, said Saturday it would increase its stake in Volkswagen from 27.3 percent to 31 percent in the next week, a move that legally obliges it to make a mandatory takeover offer for the company.
Michael Baumann, a Porsche spokesman, said the company will offer the legal minimum $134.50 per Volkswagen share, lower than the $156.86 VW closed at in Frankfurt trading on Friday.
"We do not expect many Volkswagen shareholders to offer us their shares," Baumann told the Associated Press. "Which means simply that we intend to go to 31 percent. We do not by any means intend to take over."
The offer is set to take place Monday.
Volkswagen's board chairman and former CEO, Ferdinand Piech, is a member of the family that controls Porsche. He is the grandson of Ferdinand Porsche, the designer of VW's original Beetle model, and the Porsche and Piech families own more than half of Porsche's stock and voting shares.
In its statement, Porsche said it was seeking the larger stake as a response to fears that European Union judges will force the German government to repeal its law blocking a foreign takeover of Volkswagen.