We have to admit that we have found the voices insisting that Porsche, the large hedge fund with an interest in cars, was engaging in market manipulation rather squeaky and shrill sounding. True, the news that one hedge fund manager was said to be “in tears” (we are told that the rumor it was Larry Robbins is a “vicious lie”) when the squeeze hit caused much snickering around the Dealbreaker offices. Be this as it may, such calls are beginning to sound sympathetic as the process grinds ever on.
Volkswagen AG said Sunday it was indefinitely postponing talks over a planned integration with Porsche Automobil Holding SE, but the sports-car maker insisted that only the next round had been canceled.
As the power struggle between two of Germany’s leading auto companies appeared to increase, Volkswagen spokesman Peik von Bestenbostel told the Associated Press that the talks had been put on hold for an undetermined period of time, and urged a more direct engagement from Porsche.
“Before we can take up talks again, it is necessary that Porsche adopts a clearly constructive attitude toward them,” Mr. von Bestenbostel said.
But Porsche insisted in a statement Sunday that while a working-group meeting Monday on the fusion of the two car makers had been canceled, “The negotiations that were begun last week will continue as planned.”
“German Auto Firms Dispute How Long Integration Effort Will Be on Hold”?
Please, mommy, please, make it stop. VW, Porsche Take Break in Talks [The Wall Street Journal]
Any number of interests have been screaming bloody murder over Porsche’s little Volkswagen adventure, many with the idea that Porsche should be investigated for market manipulation. An early inquiry was generally felt lacking (by smarting hedge funds for instance). Well, took a while, but the second investigation is here:
Porsche shares fell sharply on Tuesday after the German financial watchdog launched a new market manipulation probe into its attempted takeover of Volkswagen and VW’s chairman publicly attacked the sports carmaker’s management.
Bafin, the regulator, launched the second such investigation in seven months after a German magazine report alleged that Porsche had informed the state of Lower Saxony, VW’s second largest shareholder, in February 2008 about its intention to lift its stake in Europe’s largest carmaker to 75 per cent. The report said this occurred long before Porsche made these plans public.
Old timers at Dealbreaker will remember with fondness the days when Volkswagen briefly became the largest company by market-cap in the world, and when it became clear to a much wider audience that Porsche made more money from their barbarian-like, hedge fund behavior* than that whole selling cars thing.
You might also remember that Porsche has been lusting, in the German sense, after Volkswagen, for a long time.
Now this:
Porsche Automobil Holding SE and Volkswagen AG, two of the storied names in Germany’s car-making history, said Wednesday they plan to merge their operations, creating an integrated auto giant with 10 independent brands, including Porsche’s coveted sports-car operations.
Following a meeting of Porsche’s owner families – Porsche and Piech – the company said in a statement that a task force is set to establish within the next four weeks the basis for a merged company.
Porsche said the families Wednesday discussed proposals laid out by Porsche’s and Volkswagen’s executive boards, which include capital measures, and agreed that an integrated car-manufacturing group should be forged.
A person familiar with the situation said the current plan includes a possible capital increase by around EUR5 billion to reduce Porsche’s debts, which fueled speculation about its financial situation in recent weeks.
“In the final structure, 10 brands shall stand below an integrative leading company alongside each other, whereby the independence of all brands and explicitly also of Porsche shall be ensured,” the Stuttgart-based auto maker said.
Porsche wants, Porsche gets. No? Well, not exactly. The line that seems to be coming out is that famous “mergers of equals” play. You know, like Daimler-Chrysler? But, now even Lower Saxony (which holds a veto right) looks ready to stand aside. The times they are a changing. We’ll see who is left standing. * “To crush your financial enemies. See der capital driven before you. Hear the lamentations of dee regulatory relations women.” Porsche, Volkswagen Seek To Merge Operations [The Wall Street Journal]
Seems Volkswagen has worn out its welcome and might be asked to leave the DAX.
Deutsche Boerse AG, operator of the Frankfurt stock exchange, said in a statement today that from Nov. 3 it may at any time remove a DAX stock whose weighting exceeds 10 percent and whose share price over the preceding 30 trading days had annualized volatility of more than 250 percent.
“I have hedge fund managers literally in tears on the phone,” says one London-based car analyst. [FT] Firm: Tactic With Respect to VW Holdings
Perry: Sticking It Out
Henderson: Sticking It Out
OZ Overseas Fund II, Ltd: Exited in October With ~1% Exposure
Greenlight Capital: Unknown
SAC: Unknown
Och Ziff: Unknown
Marshall Wace: Unknown
Odey Asset Management:Unknown
York Capital: Unknown
Glenview Capital: Unknown
Deutsche Bank: Unknown
Commerzbank: Unknown
Société Générale: Unknown Final Tally:
Sticking It Out: 2
Exited: 1
No Clue: 10 (DB, Com, Soc adds)
It seems a few big players were bitten a bit harder than you would expect by the recent whip-saw action at Volkswagen. Funds including SAC, Och Ziff, Perry Capital, Greenlight Capital, Marshall Wace, Odey Asset Management, York Capital and Glenview Capital seem to have taken a slap or two, and, if the Times Online is to be believed, some funds out there are near bankruptcy because of the swing. (Sloppy risk management, that).
Perhaps the bigger losers are the prop-desks at big investment banks (what remain of their number). Deutsche Bank and Commerzbank have suffered from rumored exposure along with Société Générale. (Hah hah! Sorry, we couldn’t help it. They’re French).
Porsche, on the other hand, is sitting on something like EUR 6 billion in paper profits.
At issue is the German regulatory environment, which does not require the disclosure of large stakes in cash-settled options. As a result, Porsche could end up with effective control of Volkswagen without so much as a 13D filing. Mongrel General: WRONG! Porsche. What is best in life? Porsche: To crush your financial enemies. See der capital driven before you. Hear the lamentations of dee regulatory relations women. Hedge funds fear bankruptcy after Porsche squeeze [Times Online]
We have to admit that we have found the voices insisting that Porsche, the large hedge fund with an interest in cars, was engaging in market manipulation rather squeaky and shrill sounding. True, the news that one hedge fund manager was said to be “in tears” (we are told that the rumor it was Larry Robbins is a “vicious lie”) when the squeeze hit caused much snickering around the Dealbreaker offices. Be this as it may, such calls are beginning to sound sympathetic as the process grinds ever on.
