Porsche rejects latest merger offer by Volkswagen: report

Volkswagen proposal involves Emirate of Qatar and the state of Lower Saxony

By Ronald D. Orol, MarketWatch
WASHINGTON (MarketWatch) -- Porsche Automobil Holding SE said Saturday it is rejecting an ultimatum by Volkswagen and a large shareholder to accept a merger of the two automotive companies that would have put VW in charge, Dow Jones Newswires reported Saturday.
The new proposal sought to have Porsche CEO Wendelin Wiedeking and Chairman Wolfgang Porsche agree by the end of June to a deal that would have had the Emirate of Qatar buying Porsche's stock options in VW, with VW taking a 49 percent stake in Porsche's sports-car business for 3 billion euros to 4 billion euros ($4.2 billion to $5.6 billion), reports said.
If the deal were to go ahead, the Porsche family, together with Porsche co-owner Ferdinand Piech, would eventually own 40 percent of the car manufacturer. The state of Lower Saxony would own an additional 20 percent, Qatar would control 15 percent and another currently unnamed sovereign-wealth fund would own an additional 5 percent.
However, if Porsche doesn't accept Volkswagen's proposal, Volkswagen could press Porsche to pay back a 700 million euro loan by September. Volkswagen granted the loan to Porsche in March.
According to reports, Wolfgang Porsche said in a statement that the company doesn't accept blackmail offers, referring to the possibility that Volkswagen could insist on a redemption of the loan.
Porsche owns a 51 percent stake in Volkswagen. It has abandoned plans to hike that stake to 75 percent.

 

Family squabble. Pistols at dawn, I say.