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Porsche denies VW coup plot

2006-11-19 11:19
Frankfurt - Sportscar maker Porsche does not plan to make a full takeover bid for Volkswagen, in which it is already the biggest shareholder, German magazine Focus reported on Saturday.

Focus said Ferdinand Piech, whose family owns Porsche and who is also supervisory board chairman of VW, had told other members of the VW board he did not intend to take over Europe's biggest carmaker. Focus did not give a source for its report.

Porsche said this week it had raised its stake to 27.4 percent and aimed to increase it to as much as 29.9 percent. A 30-percent stake would trigger a compulsory takeover bid.

It also said it planned to create authorised capital worth round €8bn as a possible acquisition currency. VW shares hit an eight-year high, taking the company's market capitalisation to about €28bn.

Focus said Porsche's owners did not want to take the financial risks that would be involved in a takeover bid.

Volkswagen declined to comment on the report, and Porsche was not immediately available.

Last week, the VW supervisory board effectively unseated CEO Bernd Pischetsrieder and replaced him with Piech's closest ally, Audi boss Martin Winterkorn, in a coup that was widely interpreted as a power grab by Piech.

In an interview released on Saturday, the state premier of Lower Saxony, which is VW's second-biggest shareholder, called for an end to the power struggle within VW.

"There must finally be an end to the power games," Christian Wulff told the Bild am Sonntag in an interview, due to be published on Sunday.

Wulff, who has often crossed swords with Piech, said he would be against Porsche CEO Windelin Wiedeking's succeeding Piech as supervisory board chief next year.

"That would go against my opinion that we should remain fair to all our shareholders," Wulff said. "Large shareholders like the state of Lower Saxony and Porsche shouldn't compete for the supervisory board leadership, in my view."

Porsche began acquiring VW shares just over a year ago, when it bought an 18.5-percent stake. At the time, the companies said the move would cement their cooperation.

Germany's financial regulator said on Saturday it had referred a case of suspected insider dealing in Porsche shares before the announcement to state prosecutors.

A spokesman for the watchdog, BaFin, confirmed a report in Wirtschaftswoche magazine that the investigation had been passed on to the Frankfurt state prosecutor. The Frankfurt prosecutor could not immediately be reached for comment.

According to the magazine report, a fund manager for a foreign firm was suspected of having known that Porsche was about to buy the stake, and sold 15 million euros' worth of Porsche shares.

In the event, Porsche shares gained in value and are now worth about 50 percent more than they were at that time.

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