porsche shares take a dive over volkswagon merger
Last Updated : GMT 06:41:18
Arab Today, arab today
Arab Today, arab today

Porsche shares take a dive over Volkswagon merger

Arab Today, arab today

Arab Today, arab today Porsche shares take a dive over Volkswagon merger

Berlin - Arabstoday

Porsche plunged the most in more than two years after saying efforts to combine with Volkswagen by the end of 2011 had failed because of pending lawsuits. The merger has been held up by lawsuits in the US and an investigation by German prosecutors linked to Porsche\'s botched effort to buy VW. The two carmakers agreed to combine in 2009 after Porsche racked up more than €10 billion (Dh50.1 billion) of debt in the attempt to take over VW. Short sellers of VW stock have sued Porsche in the US, claiming the carmaker secretly piled up VW shares and later caused the investors to lose more than $1 billion (Dh3.67 billion). A lawyer representing claimants in Germany said yesterday the plaintiffs had officially filed a suit seeking €1.1 billion in damages. Porsche, which has repeatedly denied all wrongdoing, identified the possible German lawsuit as a concern earlier this year. Unquantifiable risks \"The lawsuits are posing risks that cannot be quantified,\" said Tim Schuldt, a Frankfurt-based analyst at Equinet AG who recommends selling VW stock and has a ‘reduce\' recommendation on Porsche shares. \"We won\'t see results on the suits until next year. Moving ahead with a merger in such an unpredictable environment would be the wrong thing to do.\" Porsche preferred stock plunged €5.98, or 14 per cent, to close in Frankfurt trading at €37.99, the biggest drop since May 7, 2009. The shares are down 26 per cent this year, valuing the Stuttgart, Germany-based company at €11.7 billion. VW\'s preferred shares fell €4.20, or 3.9 per cent, to €103.75, giving it a market value of €45.8 billion. The two carmakers will now need to come up with a new agreement if they intend to combine VW with Porsche\'s holding company, which owns 50.7 per cent of VW\'s common shares and 50.1 per cent of the Porsche car-making business. The original deal required the final decisions by the end of 2011. VW and Porsche also have the option to forego a full merger and instead fold Porsche\'s car-making business into the VW group while leaving the holding company to manage the Volkswagen shares. Possible option As part of the original deal struck in August 2009, Volkswagen can pay cash for the remaining stake in Porsche\'s automobile operations through a put/call structure allowing the sports-car maker to sell the rest of its core business to VW. Those options could be exercised between November 2012 and January 2015. While this option would allow VW to fully fold Porsche\'s automotive business into the VW group, it would leave Porsche\'s holding company to manage the VW shares and take legal and financial responsibility for the outcome of the lawsuits. The price to follow this route would be linked to the valuation of the auto-making business at the time of the purchase. VW said a necessary revaluation of the put/call structure for accounting reasons will have a \"clearly positive contribution\" to third-quarter figures whereas Porsche said it will likely post a \"negative group result\" for the first nine months. Porsche\'s third-quarter earnings may be reduced by about €1.6 billion because of the revaluation of the holding company\'s remaining stake in its car-making operations, a person familiar with the matter said. The exact impact of the non-cash adjustment of the auto unit\'s valuation on Porsche\'s books will be released when the holding company publishes results in late October, the person said, declining to be identified discussing the matter before an official announcement.

arabstoday
arabstoday

Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

porsche shares take a dive over volkswagon merger porsche shares take a dive over volkswagon merger

 



Name *

E-mail *

Comment Title*

Comment *

: Characters Left

Mandatory *

Terms of use

Publishing Terms: Not to offend the author, or to persons or sanctities or attacking religions or divine self. And stay away from sectarian and racial incitement and insults.

I agree with the Terms of Use

Security Code*

porsche shares take a dive over volkswagon merger porsche shares take a dive over volkswagon merger

 



Arab Today, arab today
Arab Today, arab today Skincare PR Performance Full Year 2017

GMT 10:35 2018 Monday ,22 January

Skincare PR Performance Full Year 2017
Arab Today, arab today New hunt for flight MH370 gets under way

GMT 02:36 2018 Wednesday ,24 January

New hunt for flight MH370 gets under way
Arab Today, arab today Modern colorful bedroom renovation

GMT 11:23 2017 Thursday ,21 December

Modern colorful bedroom renovation
Arab Today, arab today France sanctions businesses linked

GMT 01:58 2018 Wednesday ,24 January

France sanctions businesses linked
Arab Today, arab today Turkey detains dozens more

GMT 02:09 2018 Wednesday ,24 January

Turkey detains dozens more
Arab Today, arab today
Arab Today, arab today

GMT 07:22 2017 Thursday ,23 November

Zimbabwe's next leader heads home after Mugabe exit

GMT 20:34 2018 Saturday ,20 January

Bahrain press headlines

GMT 22:38 2018 Tuesday ,23 January

Bahrain Press headlines

GMT 07:23 2017 Thursday ,23 November

Zimbabwe's next leader heads home after Mugabe exit

GMT 16:25 2016 Thursday ,22 December

Italian bank Monte Paschi edges closer to state bailout

GMT 06:03 2014 Wednesday ,09 April

Please .. Let Gaza breathe!

GMT 09:12 2017 Friday ,17 November

Gleam Futures represents Grace Beverley

GMT 04:18 2017 Sunday ,26 November

Bella magazine appoints celebrity writer

GMT 06:00 2017 Sunday ,29 October

Childrenswear brand Once appoints Dyelog

GMT 16:33 2014 Thursday ,13 November

Al-Ehtimam Bil Aakhareen

GMT 03:34 2017 Sunday ,05 November

Needle & Thread relocates press office

GMT 14:56 2017 Thursday ,21 December

Ryanair says formally recognises pilots' union

GMT 16:03 2017 Thursday ,21 December

US hits Myanmar general in new global rights sanctions
Arab Today, arab today
Arab Today, arab today
 
 Arab Today Facebook,arab today facebook  Arab Today Twitter,arab today twitter Arab Today Rss,arab today rss  Arab Today Youtube,arab today youtube  Arab Today Youtube,arab today youtube
arabstoday arabstoday arabstoday arabstoday
arabstoday arabstoday arabstoday
arabstoday
بناية النخيل - رأس النبع _ خلف السفارة الفرنسية _بيروت - لبنان
arabstoday, Arabstoday, Arabstoday