Porsche launches mandatory offer for Scania

Porsche on Monday launched a low-ball, mandatory takeover offer for truckmaker Scania while reiterating it had no strategic interest in the company.

The German sports carmaker was required by Swedish regulators to make the general offer after it increased its stake in Volkswagen, which controls Scania, to more than 50 per cent last week.

Given that it does not intend to take over Scania, Porsche on Monday offered the minimum required by regulators as expected, and at prices too low to generate real interest among Scania shareholders. It is offering to buy each A share for SKr68.52 and each B share for SKr67.10. Scania’s A shares were up 1.1 per cent on Monday at SKr70.25 while the B shares were up 0.7 per cent at SKr69.5.

Porsche has hinted that any shares it would gain in the offer would be sold on
to VW. That would mirror the approach Porsche took when forced to bid for
Audi, the luxury car unit of VW that has a small free float. Its shares rose 2.3 per cent to €47.83.

VW currently owns 69 per cent of Scania.

The increase of Porsche’s stake in VW from 42 to just over 50 per cent gives Porsche control of not just VW’s well-known stable of car brands, ranging from Bugatti and Lamborghini to Skoda and Seat, but also Scania and its German rival, MAN, in which VW has a controlling stake of nearly 30 per cent.

Industry executives and analysts expect MAN and Scania to merge one day, especially as MAN owns about 20 per cent of its Swedish rival. But, following MAN’s purchase late last year of VW’s truck assets, it is unclear what the complicated structure will look like.

Porsche caused turmoil in the markets last year when the carmaker revealed it held nearly 75 per cent in VW through a direct stake and share options. But it waited several months, until VW’s shares fell from a high of €1,005 to about €250, before increasing its direct stake to 50.8 per cent.