Volkswagen Selects Banks for Porsche Sports Car IPO

(Bloomberg) -- Volkswagen AG has chosen lead banks for its blockbuster listing of iconic sports-car maker Porsche in what could be one of Europe's biggest initial public offerings this year, people with knowledge of the matter said.

Europe's largest automaker has picked American firms Goldman Sachs Group Inc., Bank of America Corp., JPMorgan Chase & Co. and Citigroup Inc. as joint global coordinators for the proposed share sale, the people said. The listing could value Porsche at as much as 90 billion euros ($100 billion), some of the people said, asking not to be identified because the information is private.

Some advisers pitched potential valuations of more than 100 billion euros, citing the trading levels of other luxury and electric carmakers as well as the firm's own technology and growth potential.

VW plans to add more banks to the deal on more minor roles, according to the people. PJT Partners Inc. is advising holding company Porsche Automobil Holding SE's supervisory board, which is controlled by the billionaire Porsche and Piech families, the people said. JPMorgan -- alongside its role at Volkswagen on the IPO -- has been helping the family holding company as well.

Representatives for VW and the banks declined to comment.

Europe's largest automaker is planning to list a minority stake in Porsche, one of its most coveted assets, in the fourth quarter to help finance the industry's biggest push into electric cars and boost its valuation. If VW goes ahead as currently planned, the IPO would allow the Porsche and Piech family to claw back direct influence in what used to be their family enterprise.

VW has earmarked 89 billion euros in spending on technologies like software and electric cars through 2026, and the separation of Porsche could offer new funding options for the group. VW largely relies on generating enough cash on its own or issue bonds as its convoluted shareholder structure limits options to raise fresh equity capital.

A listing would help revive an otherwise anemic market for IPOs, which plummeted in the first quarter as volatility stoked by the war in Ukraine and soaring inflation puts investors on edge. Preparations for the listing are continuing, though negative implications because of the conflict cannot be ruled out, Porsche SE Chief Financial Officer Johannes Lattwein said on Tuesday.

VW's track record on major structural changes is mixed, even as the group has long sought to simplify its sprawling setup. A listing of Traton SE, VW's truckmaking unit, struggled for momentum amid internal ructions and a limited free float, while a push to separate the Lamborghini supercar and Ducati motorcycle brands failed.

A listing of the maker of the iconic 911 and electric Taycan could see the brand try to emulate the success of Ferrari NV, which was separated from Fiat Chrysler to reach a valuation more akin to luxury fashion brand Hermes International. Ferrari's enterprise value trades at more than 22 times earnings before interest, tax and amortization for this year. This compares to a multiple of just 1.8 for Volkswagen.

With assistance from Bloomberg