July 14 (Bloomberg) -- Porsche SE may hand over its Volkswagen AG options to Qatar for free to remove liabilities tied to the derivatives and clear the way for investments from VW and the Persian Gulf state, said three people familiar with the situation.
Qatar would then pay about 5 billion euros ($7 billion) to banks that sold Porsche the call options, said the people, who declined to be identified because the talks are private. Qatar would get shares equal to 20 percent of Volkswagen, Europe’s largest carmaker. Porsche may get a nominal payment from the transaction, the people said.
“The VW options are not an asset, but a liability for Porsche,” said Jens Schattner, a Frankfurt-based analyst at Sal. Oppenheim who recommends selling Porsche shares.
Porsche no longer has the ability to exercise the options to buy VW shares after accumulating 9 billion euros in debt as it sought to take over its larger rival. The Stuttgart, Germany- based sports-car maker, which acquired 50.8 percent of VW, may have sold put options to fund the stock-option purchases, which are included as part of the 9.64 billion euros Porsche reported as “other liabilities” as of Jan. 31, according to analysts at FAIResearch and Sanford C. Bernstein.
The derivative contracts are part of the talks Porsche is holding with Qatar as Porsche and VW fight for control in a proposed merger of the carmakers. Qatar and Porsche’s family owners have been asked to take part in a planned 5 billion-euro share sale at Porsche, people familiar with the talks have said. The Qatar Investment Authority may pay 2 billion euros for a stake in Porsche, one of the people said.
Qatar needs to take over the VW options before Volkswagen would proceed with a plan to buy a 49 percent holding in Porsche’s carmaking unit, two of the people said.
[...] Qatar may end up paying nothing to Porsche for the options if the parties determine they are only a liability for Porsche, two of the people said. Qatar may also end up paying a fee if it and VW agree that the rights have intrinsic value, one of the people said.
The options helped boost Porsche’s profit to 5.6 billion euros in the six months ended Jan. 31 as VW common shares surged. The common stock has jumped to 215 euros from 33.35 euros at the end of 2004. The carmaker reported revenue of 3.04 billion euros in the period.
Porsche has gone from the potential buyer in a tie-up with VW to the company struggling to stay independent as an eight- month back-and-forth fight for control drags on. [...]
July 18 (Bloomberg) -- Volkswagen AG wants to eventually take over all of Porsche AG, the sports-car making business of Porsche SE, German magazine Der Spiegel reported, without saying where it got the information.
Volkswagen will buy Porsche AG in two tranches, the magazine reported, initially taking a 49.9 percent stake and buying the remainder at a later stage. Porsche will then become one of 10 Volkswagen brands, according to the magazine.
The takeover would value Porsche AG at about 8 billion euros ($11.3 billion), and the family owners of both carmakers will hold 50 percent of the enlarged Volkswagen-Porsche company, Spiegel said. The German state of Niedersachsen will hold 20 percent, while the Qatar Investment Authority will have a stake of between 14.9 percent and 19.9 percent, Der Spiegel said. [...]