Companies
Governance concerns as Porsche increases VW stake
Porsche has taken
advantage of the recent ruling against a golden share provision in
Volkswagen (VW)
to increase its stake in the company to 31%, thus triggering a mandatory offer
for the German vehicle manufacturer.
However, Porsche is intending to offer VW shareholders
only the minimum price prescribed by law, and if the mandatory offer is not
accepted, Porsche will be able to continue
increasing its VW stake without having to make a further offer to the remaining
shareholders.
The “VW law”, which was introduced as part of the
company’s privatisation and prevents any shareholder holding more than 20% of
the voting rights, was declared illegal by the
European Court of Justice
advocate general in February.
The Guardian’s
Julia Finch (27 March) argued that Porsche’s plan is for the bid to fail,
thereby allowing it to increase its stake without any obligation to inform the
market how many shares it holds until it passes the 50% threshold. VW’s chairman
is Ferdinand Piëch, whose family also controls Porsche, and Finch suggested such
a situation would cause a storm of protest in the UK. VW shareholders, she
suggested, must be wondering who benefits most from this stake-building.
Links
Porsche
Volkswagen
European Court of Justice
The Guardian
April, 2007 |
