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    The war begins Porsche and VW

    FRANKFURT (Dow Jones)--The battle over the future of German sportscar maker Porsche Automobil Holding SE (PAH3.XE) escalated Monday when Porsche said it wouldn't consider the sale of a 49.9% stake to Volkswagen AG (VOW.XE) because it would then immediately have to re-negotiate a EUR10.75 billion credit facility.

    Porsche spokesman Albrecht Bamler said Volkswagen had offered directly to supervisory board Chairman Wolfgang Porsche to buy the Porsche stake, but hadn't made the offer to the company's executive board, which would have to consider such a deal.

    Volkswagen declined to comment.

    The battle over Porsche and its holding in Volkswagen, Europe's biggest car maker by sales, is becoming increasingly acrimonious. Porsche has tried to acquire Volkswagen, building up a stake of 51% plus a complex set of options that would enable it to hike its stake by around 20% if exercised. But the credit crunch and the stock market collapse meant Porsche ran into financing trouble, and it is now in talks about a capital injection from the state-owned Qatar Investment Authority.

    The company's net debt tripled to EUR9 billion when it built its VW shareholding, forcing it to abandon its plan to push for a 75% stake and gain access to Volkswagen's cash reserves.

    It may now have to give up a stake in itself in return for an investment from QIA, or give QIA some of its VW options, or a combination of both.

    All Porsche's voting rights are controlled by the Porsche and Piech families.

    Volkswagen's powerful supervisory board chairman and former Chief Executive Ferdinand Piech, who also sits on Porsche's supervisory board, favors an outright sale of Porsche's core sportscar operations to Volkswagen to raise funds for Porsche.

    Porsche would then be integrated as a tenth brand into Volkswagen along with nameplates such as Audi, Skoda or Seat.

    But Volkswagen spokesman Michael Brendel Monday reiterated that VW hadn't issued an ultimatum to Porsche requiring it to agree to a merger of the two companies by the end of this month, after Porsche Saturday had said it rejected such an ultimatum.

    "It appears that ... the relations ... between VW and Porsche have hit an all-time low," said IHS Global Insight analyst Tim Urquhart. "What was already a difficult negotiation is rapidly descending into farce," he added.

    Porsche said last month that its owner families unanimously support the plan to get an outside investor on board to safeguard the company's independence.

    The maker of models like the Cayenne and 911 said Friday that talks with QIA were nearing completion after the Qatari's completed due-dilligence and the result of that process was positive.

    The histories of Porsche and Volkswagen have been entwined ever since Ferdinand Porsche designed Volkswagen's iconic Beetle in the 1930s. Volkswagen's supervisory board chairman Piech is the grandson of Ferdinand Porsche. Porsche's supervisory board chairman Wolfgang Porsche is Piech's cousin.

    But the family ties have been tested frequently as Piech has made several controversial moves to maintain hisinfluence and forge a European auto empire offering vehicles ranging from the ultra-luxury Bugatti Veyron sportscar to Scania's heavy trucks.




    Re: The war begins Porsche and VW

    You wouldn't believe what is rumoed to be going on behind the curtains right now, I never thought that family members could hold such a grudge and be so mean. Time will tell who is going to come out of this disaster with his head still on his shoulders but one thing is for sure, this whole thing will have a serious impact on Porsche's future, in a way or another.

    I wouldn't be surprised to see one or two heads rolling soon...


    RC (Germany) - Rennteam Editor 997 Turbo, Cayenne Turbo S, BMW M3 Cab DKG, Mini Cooper S JCW

    Re: The war begins Porsche and VW


     this whole thing will have a serious impact on Porsche's future, in a way or another.

    I wouldn't be surprised to see one or two heads rolling soon...

    The solution is easy IMO.

    Porsche cannot continue with this debt given that nobody is willing to finance it. Wiedeking is the beginning of all these troubles and a thorn for everybody (Piech, Workers, VW management and Politicians).

    So sack WW and do a respectable agreement with VW, before a point of no return is reached.

    What is Porsche management expecting? A miracle?

    It's not where you're going, it's how you get there that counts



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