I know we have several Porschephiles here so thought the latest in this saga may be of interest.
FRANKFURT (Dow Jones)--Porsche Automobil Holding SE (PAH3.XE) said Saturday that it rejects an ultimatum by Volkswagen AG (VOW.XE) and the German state of Lower Saxony to make a decision over forging a combined company, indicating a new twist in a fierce power struggle behind the scenes.
"We don't let ourselves being blackmailed," Porsche supervisory board chairman Wolfgang Porsche and deputy chairman Uwe Hueck said in a statement, adding that the Wolfsburg-based company's move doesn't help any joint efforts or plans.
"We continue to assume that we plan a successful future together for the benefit of both companies. Therefore the wording of this declaration is highly irritating for us," Porsche and Hueck said. They noted that "ultimatums don't belong in the 21st century".
"We're hoping very much that... the issuers of this ultimatum calm down again and pursue their proposals in internal talks and not through headlines. We're always ready for that," they said.
A Volkswagen spokesman declined to comment.
Porsche is Volkswagen's majority shareholder with a stake of almost 51% and holds stock options to hike its stake further by around 20%.
But Porsche had to abandon its push for a 75% stake to gain full control over Europe's largest auto maker by sales and access the company's cash reserves as its net debt tripled to EUR9 billion when it build its stakeholding amid tightening credit markets.
Additionally, the so-called Volkswagen Law, which grants the state of Lower Saxony a blocking minority on important company decisions through its stake of just above 20%, wasn't abolished as anticipated by Porsche.
Porsche is currently in talks with state-controled Qatar Investment Authority over a capital injection, which would be a crucial step to shore up the company's balance sheet and give it more bargaining power in hammering out an agreement for a combined company with Volkswagen.
It remains unclear, however, if Qatar would take a stake in Porsche, where the Piech and Porsche families so far control 100% of the voting stock, take over some of Porsche's options for VW stock or a combination of both.
On Friday, Porsche said that Qatar's due diligence has been finalized with a positive result and that talks have reached "the final stretch." It dismissed speculations that the deal with Qatar was about to turn sour.
On Saturday, German weekly Der Spiegel reported on its Web site that Volkswagen issued an ultimatum until Monday to Porsche to make a decision on creating a combined company.
Der Spiegel reported that under Volkswagen's plan the company would acquire a 49% stake in Porsche Holding, which comprises the core sports car operations as well as the VW shareholding, for between EUR3 billion and EUR4 billion.
In a next step, Qatar would take over VW stock options from Porsche ahead of a merger between the two auto makers.
In a combined company, the Porsche and Piech families would hold a stake of more than 40%, Lower Saxony 20%, Qatar around 15% and another sovereign wealth fund 5%, according to Der Spiegel.
If Porsche doesn't accept Volkswagen's plan, the company could insist on Porsche paying back a EUR700 million loan in September, which Volkswagen granted to Porsche in March.
FRANKFURT (Dow Jones)--Porsche Automobil Holding SE (PAH3.XE) said Saturday that it rejects an ultimatum by Volkswagen AG (VOW.XE) and the German state of Lower Saxony to make a decision over forging a combined company, indicating a new twist in a fierce power struggle behind the scenes.
"We don't let ourselves being blackmailed," Porsche supervisory board chairman Wolfgang Porsche and deputy chairman Uwe Hueck said in a statement, adding that the Wolfsburg-based company's move doesn't help any joint efforts or plans.
"We continue to assume that we plan a successful future together for the benefit of both companies. Therefore the wording of this declaration is highly irritating for us," Porsche and Hueck said. They noted that "ultimatums don't belong in the 21st century".
"We're hoping very much that... the issuers of this ultimatum calm down again and pursue their proposals in internal talks and not through headlines. We're always ready for that," they said.
A Volkswagen spokesman declined to comment.
Porsche is Volkswagen's majority shareholder with a stake of almost 51% and holds stock options to hike its stake further by around 20%.
But Porsche had to abandon its push for a 75% stake to gain full control over Europe's largest auto maker by sales and access the company's cash reserves as its net debt tripled to EUR9 billion when it build its stakeholding amid tightening credit markets.
Additionally, the so-called Volkswagen Law, which grants the state of Lower Saxony a blocking minority on important company decisions through its stake of just above 20%, wasn't abolished as anticipated by Porsche.
Porsche is currently in talks with state-controled Qatar Investment Authority over a capital injection, which would be a crucial step to shore up the company's balance sheet and give it more bargaining power in hammering out an agreement for a combined company with Volkswagen.
It remains unclear, however, if Qatar would take a stake in Porsche, where the Piech and Porsche families so far control 100% of the voting stock, take over some of Porsche's options for VW stock or a combination of both.
On Friday, Porsche said that Qatar's due diligence has been finalized with a positive result and that talks have reached "the final stretch." It dismissed speculations that the deal with Qatar was about to turn sour.
On Saturday, German weekly Der Spiegel reported on its Web site that Volkswagen issued an ultimatum until Monday to Porsche to make a decision on creating a combined company.
Der Spiegel reported that under Volkswagen's plan the company would acquire a 49% stake in Porsche Holding, which comprises the core sports car operations as well as the VW shareholding, for between EUR3 billion and EUR4 billion.
In a next step, Qatar would take over VW stock options from Porsche ahead of a merger between the two auto makers.
In a combined company, the Porsche and Piech families would hold a stake of more than 40%, Lower Saxony 20%, Qatar around 15% and another sovereign wealth fund 5%, according to Der Spiegel.
If Porsche doesn't accept Volkswagen's plan, the company could insist on Porsche paying back a EUR700 million loan in September, which Volkswagen granted to Porsche in March.