Porsche Profit Likely to Wane in 2006; Automaker Mum on VW Plans

Washington DC December 6, 2006; The AIADA newsletter reports that during a press conference yesterday, Porsche CEO Wendelin Wiedeking said he was unable to give any "conclusive answers" regarding his company's intentions towards Volkswagen, reported Reuters.

Speculation surrounding a possible Porsche takeover of VW has heated up in the past few weeks after Porsche said it planned to increase its capital by up to half in a move that could raise 7.8 billion euros in fresh cash at the current stock price, which it could then use to help finance a tender offer.

Porsche said in mid-November that it aimed to raise its stake in Europe's largest carmaker to just below 30 percent. If it surpasses 30 percent; however, Porsche would be required to launch a mandatory tender bid for shares in Volkswagen.

Currently, Porsche is VW's largest shareholder with a 27.4 percent stake. Wiedeking also announced that Porsche's pretax profits would likely decline this year from the $2.81 billion it made in the year to end-July as a result of unpredictable external factors such as the price of VW's stock and VW's dividend policy. Porsche said it expected its "high level of sales" to continue.