Porsche-Volkswagen Settlement May Be Delayed
July 20, 2009
A decision on how to settle the contentious Volkswagen-Porsche ownership battle may not
occur on Thursday, as many had anticipated, and instead be delayed until the end of the month.
The supervisory boards of the two German automakers were set to meet separately in Thursday, presumably to work out terms of a possible merger. But German media reports suggest a decision may not be forthcoming after all.
Last Thursday, Porsche CEO Wendelin Wiedeking said the deal would be completed "within days." Wiedeking, backed by chairman Wolfgang Porsche, is supposed to present a proposal to the supervisory board that rescues the sports car company from VW's grip with an investment by the Qatar Investment Authority. Porsche may sell a stake as well as the options it holds in Volkswagen, which has put the smaller company in serious debt.
But Wiedeking faces possibly insurmountable opposition from Volkswagen Chairman Ferdinand Piech, a cousin to Wolfgang Porsche and a large Porsche shareholder. Porsche could be partly or fully absorbed into Volkswagen as its 10th brand, or there could be some compromise of some Volkswagen ownership of Porsche as well as investment by Qatar.
And Wiedeking's job is increasingly in jeopardy over this mess, as it is rumored he could be ousted. He has a contract that expires in 2012 that would have to be paid off. He made $113 million in the last fiscal year.
On Monday, the German newswire, Deutsche Press-Agentur, reported that Porsche's board won't rule on a proposed stake sale at a meeting scheduled for July 23, turning a decision over to the board's executive committee, which will convene late this month.
Another German media outlet, Sueddeutsche Zeitung, reported Monday that Volkswagen's planned takeover of Porsche could fall apart over a $4.3 billion tax bill. Apparently, company officials are looking for a way to avoid paying the tax.
Nonetheless, news of the merger delay prompted a 12 percent, one-day fall din Volkswagen's stock price, the steepest drop in seven months.
Posted by Michelle Krebs at 10:25 AM under Companies , News , Personalities | Comments (0) | digg this | Seed Newsvine
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