Due to the recent dramatic distortions on the financial markets, Porsche Automobil Holding SE, decided over the weekend to disclose its holdings in shares and hedging positions related to the takeover of Volkswagen AG.
At the end of last week Porsche SE held 42.6% of the Volkswagen ordinary shares and in addition 31.5& in so-called cash-settled options relating to Volkswagen ordinary shares to hedge against price risks, representing a total of 74.1%.
Upon settlement of these options, Porsche will receive in cash the difference between the actual Volkswagen share price and the underlying strike price in cash. The Volkswagen shares will be bought in each case at market price.
Assuming the economic framework conditions are suitable, the aim is to increase to 75% in 2009, paving the way to a domination agreement. The intention to increase the Volkswagen stake to above 50% in November/December 2008 remains unchanged.
Porsche has decided to make this announcement after it became clear that there are many more short positions in the market than expected. The disclosure should give so-called short sellers - meaning financial institutions that have betted on a falling share price in Volkswagen - the opportunity to settle their relevant positions without rush and without facing major risks.
In addition, the EU commission will (according to media reports over the weekend) soon qualify the new draft of the VW Act tabled by the Federal Government as not complying with EU law. It is therefore to be expected that a new lawsuit will be filed with the European Court of Justice.Another reason for today's step is that the families Porsche and Pich (who own all Porsche ordinary shares) have expressed their unconditional and undivided backing of the steps taken by the members of Porsche SE's board of management, Dr Wendelin Wiedeking and Holger Hrter. As reported, both families clearly expressed last week their support for a domination of the Volkswagen group by Porsche.